Milton Friedman on the Federal Reserve

85 passages for “the Federal Reserve”, 72 checked against the source. Page 8 of 9.

Full topic page: Monetary policy and the Federal Reserve

1. “The problem of reserve forces is more difficult but hardly insoluble. In any event, despite the difficulties, the reserves now in existence are in far better condition to contribute quickly and effectively to our military effort than the reserves were under the draft, when they were manned primarily by men seeking to avoid the draft.”

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

3. “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.”

4. “Keep your eye on one thing and one thing only: how much government is spending, because that is the true tax. Every budget is balanced. There is no such thing as an unbalanced federal budget. You're paying for it. If you're not paying for it in the form of explicit taxes, you're paying for it indirectly in the form of inflation or in the form of borrowing. The thing that you keep your eye on is what government spends. And the real problem is to hold down government spending as a fraction of our income. And if you do that, you can stop worrying about the deficit.”

5. “The first victory came in Tennessee on March 7, 1978, when a 2-to-1 majority approved an amendment to limit the “rate of growth” of state spending to the “estimated rate of growth of the state’s economy.””

6. “That illustrates a general rule: If a private enterprise is a failure, it closes down—unless it can get a government subsidy to keep it going; if a government enterprise fails, it is expanded. I challenge you to find exceptions.”

7. “By this line of reasoning, the corner grocer and the A&P are “recipient institutions” because some of their customers receive social-security checks. The New York Times and The Chicago Tribune are Federal contractors because welfare recipients buy papers. How silly can you get?”

8. “The U.S. is still, fortunately, some way from a national health service. However, the rising costs of medical care—as government has expanded its role and bureaucracy has multiplied—presumably reflect an early stage of the process documented by Gammon.”

9. “It is my view that it is desirable for the people to limit their government's budget, to decide how much in total they are willing to pay for their government. Having done this, it is desirable for them to delegate to their elected representatives the difficult task of dividing that budget among competing good proposals.”

10. “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.”