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Milton Friedman on Government spending and deficits

That is a widespread myth, that it is possible to spend money with nobody paying for it. You have everybody screaming that we ought to have new, bigger, more generous government programs. Where are we going to raise the money? Tax business. But business corporations can’t pay any taxes. A corporate executive may sign the check, but where does he get the money? From his stockholders or from his customers or from his employees. Unlike the federal government, he doesn’t have a printing press in his basement. So the only way he can pay money to the government is imposing a burden on somebody. Government cannot spend money at nobody’s expense.
Economic Myths and Public Opinion
Column, 1976, The Alternative: An American Spectator, vol. 9
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  1. The elementary fact is that ‘business’ does not and cannot pay taxes. Only people can pay taxes. Corporate officials may sign the check, but the money that they forward to Internal Revenue comes from the corporation’s employees, customers, or stockholders.
    An Economist's Protest: Columns in Political Economy
    Book, 1966, p. 86
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  2. This leads to my next myth—the myth that government can spend money at nobody’s expense. What was really involved in that last story was that somehow the local people do not pay out the money coming down from Washington somebody else does. Of course, the truth is that the money makes a round trip between Florida and Washington, and there is a discount taken off for cash as it passes through Washington. Some of you may remember that wonderful description of government by the French economist, Frederic Bastiat, who said that government is that fiction whereby everybody believes that he can live at the expense of everybody else.
    Economic Myths and Public Opinion
    Column, 1976, The Alternative: An American Spectator, vol. 9
    Not yet checkedRead the original
  3. Nobody spends somebody else's money as carefully as he spends his own. Nobody uses somebody else's resources as carefully as he uses his own.
    Commanding Heights: Milton Friedman interview
    Interview, 2000, PBS, “On Freedom and Free Markets,” interview conducted October 1, 2000
    Checked against the sourceRead the transcript

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