The Big Myth of Government Deficits

Here in the US and around the world, governments did some extraordinary things. [...] They did all of this and more without raising taxes or having a prolonged battle over the usual question of how to pay for it.

As Congress debates these questions, everyone is back to asking, how will you pay for it? It's the wrong question. In fact, the right questions don't involve money at all. Instead of worrying about where the financing will come from, we should be asking, are these things worth doing and do we have the real resources, the people, the equipment, the raw materials and the technology to do them? Well, they make society better off. And do we have the political will to act?

Back in 1983, the prime minister of Great Britain, Margaret Thatcher, said these words: "If the state wishes to spend more, it can do so only by borrowing your savings or by taxing you more, and it is no good thinking that someone else will pay. That someone else is you. There is no such thing as public money. There is only taxpayers' money." Maybe you've heard the contemporary version of Thatcher's dictum. "There is no magic money tree." [...] It sounds worrying. As individuals, we know that when we borrow money to go to college, start a business or buy a home, we're personally saddled with that debt. We have to find the money to pay it back. [...] But the federal government is fundamentally different.