Milton Friedman on the Federal Reserve

71 passages for “the Federal Reserve”, 58 checked against the source. Page 6 of 8.

Full topic page: Monetary policy and the Federal Reserve

1. “It is immediately clear that if we were to take up each case separately, a majority would almost surely vote to deny free speech in most cases and perhaps even in every case. ( … ) Exactly the same considerations apply in the monetary area. If each case is considered on its merits, the wrong decision is likely to be made in a large fraction of cases because the decisionmakers are examining only a limited area and are not taking into account the cumulative consequences of the policy as a whole.”

2. “The organization of economic activity through voluntary exchange presumes that we have provided, through government, for the maintenance of law and order to prevent coercion of one individual by another, the enforcement of contracts voluntarily entered into, the definition of the meaning of property rights, the interpretation and enforcement of such rights, and the provision of a monetary framework.”

3. “Over short periods, the relation between growth in money and growth in nominal income is often hard to see, partly because the relation is less close for short than for long periods, but mostly because it takes time for changes in monetary growth to affect income. And how long a time is itself variable. Today's income growth is not closely related to today's monetary growth; it depends on what has been happening to money in the past. What happens to money today affects what is going to happen to income in the future”

4. “A government which maintained law and order, defined property rights, served as a means whereby we could modify property rights and other rules of the economic game, adjudicated disputes about the interpretation of the rules, enforced contracts, promoted competition, provided a monetary framework, engaged in activities to counter technical monopolies and to overcome neighborhood effects widely regarded as sufficiently important to justify government intervention, and which supplemented private charity and the private family in protecting the irresponsible, whether madman or child—such a government would clearly have important functions to perform. The consistent liberal is not an anarchist.”

5. “I would far rather have total federal spending at $200 billion with a deficit of $100 billion than a balanced budget at $500 billion. The thing we must keep our eye on is what government spends.”

6. “On a technical level, I believe that there is no persuasive evidence that, given the course of monetary policy and monetary aggregates, federal government deficits have any stimulative effect. They have a stimulative effect only insofar as they are financed by a more rapid increase in the quantity of money than would otherwise occur.”

7. “Most colleges and universities have accepted—and lobbied extensively for—Federal funds, and their receipt of Federal funds is the legal justification for HEW jurisdiction over their hiring and other practices. They are hoist on their own petard when they now complain that he who pays the piper is calling the tune.”

8. “The issues that will arise will be a continuation of those that have bothered us these past decades. The main ones seem to me to be as follows: 1. The appropriate relation between the level of taxes and the level of expenditures on the average of good and bad years. 2. Criteria for determining the fraction of national income that is appropriately spent through the Federal Government.”

9. “There's a smokestack on the back of every government program.”

10. “What is called a deficit is a form of taxation. It is a very bad form of taxation, but it is a form of taxation.”