My attempt to avoid talking with Henry until I got my ducks in line had failed. I decided I had to make the best of the situation, but couldn’t quite figure out how I would do that. I took a deep breath, mentally hunkered down to weather the storm I knew was coming, and punted.
“Hi, Henry”, I said, “How’re you doing? I haven’t forgotten what we were talking about. In fact, I have been giving it a lot of thought. You know, about national insolvency and inflation. I’m having a tough time getting it all straight in my mind. It’s very confusing. Can you, maybe, simplify it a bit?”
Henry replied, “Here we shall have to say simply that all government expenditures must eventually be paid out of the proceeds of taxation; that to put off the evil day merely increases the problem, and that inflation itself is merely a form, and a particularly vicious form, of taxation.
“Well,” I responded, “ I don’t know about the “evil” part. I think I understand some of what you’re saying. What’s your point?”
Henry’s forehead got slightly wrinkled, he sighed, and said, “Having put aside for later consideration the network of fallacies which rest on chronic government borrowing and inflation, we shall take it for granted that either immediately or ultimately every dollar of government spending must be raised through a dollar of taxation.”
“Okay. That makes sense. Everybody knows that. But, again, what’s your point?” said I.
Said Henry, “Once we look at the matter in this way, the supposed miracles of government spending will appear in another light.”
I started feeling a bit defensive, so I said, “I don’t know what you mean by ‘miracle’, Henry, but, obviously, there has to be some government spending. Certain things are necessary, right?”
Henry smiled and said, “A certain amount of public spending is necessary to perform essential government functions A certain amount of public works—of streets and roads and bridges and tunnels, of armories and navy yards, of buildings to house legislatures, police and fire departments—is necessary to supply essential public services.”
I thought, “This is better. At last, we’ve got some agreement.” So, I said, “Well, yeah, that’s what I meant.” Then, getting a brilliant flash of inspiration, I threw in, “And, think of all the jobs that creates and all the money it brings in to the community, too.”
Henry’s face went flat, his eyes narrowed, he leaned toward me slightly. “Oops,” I thought. “What did I just say? We are in agreement. aren't we?”
With no hint of humor in his voice, Henry responded, “With such public works, necessary for their own sake, and defended on that ground alone, I am not here concerned. I am here concerned with public works considered as a means of ‘providing employment’ or of adding wealth to the community that it would not otherwise have had.”
From Henry’s demeanor, I could tell he had a lot more to say on this. I also knew that I had just stepped in some smelly stuff and that what followed was going to be bad for whatever arguments I could have come up with.
“Why do I do this to myself,” I thought.
“Hi, Henry”, I said, “How’re you doing? I haven’t forgotten what we were talking about. In fact, I have been giving it a lot of thought. You know, about national insolvency and inflation. I’m having a tough time getting it all straight in my mind. It’s very confusing. Can you, maybe, simplify it a bit?”
Henry replied, “Here we shall have to say simply that all government expenditures must eventually be paid out of the proceeds of taxation; that to put off the evil day merely increases the problem, and that inflation itself is merely a form, and a particularly vicious form, of taxation.
“Well,” I responded, “ I don’t know about the “evil” part. I think I understand some of what you’re saying. What’s your point?”
Henry’s forehead got slightly wrinkled, he sighed, and said, “Having put aside for later consideration the network of fallacies which rest on chronic government borrowing and inflation, we shall take it for granted that either immediately or ultimately every dollar of government spending must be raised through a dollar of taxation.”
“Okay. That makes sense. Everybody knows that. But, again, what’s your point?” said I.
Said Henry, “Once we look at the matter in this way, the supposed miracles of government spending will appear in another light.”
I started feeling a bit defensive, so I said, “I don’t know what you mean by ‘miracle’, Henry, but, obviously, there has to be some government spending. Certain things are necessary, right?”
Henry smiled and said, “A certain amount of public spending is necessary to perform essential government functions A certain amount of public works—of streets and roads and bridges and tunnels, of armories and navy yards, of buildings to house legislatures, police and fire departments—is necessary to supply essential public services.”
I thought, “This is better. At last, we’ve got some agreement.” So, I said, “Well, yeah, that’s what I meant.” Then, getting a brilliant flash of inspiration, I threw in, “And, think of all the jobs that creates and all the money it brings in to the community, too.”
Henry’s face went flat, his eyes narrowed, he leaned toward me slightly. “Oops,” I thought. “What did I just say? We are in agreement. aren't we?”
With no hint of humor in his voice, Henry responded, “With such public works, necessary for their own sake, and defended on that ground alone, I am not here concerned. I am here concerned with public works considered as a means of ‘providing employment’ or of adding wealth to the community that it would not otherwise have had.”
From Henry’s demeanor, I could tell he had a lot more to say on this. I also knew that I had just stepped in some smelly stuff and that what followed was going to be bad for whatever arguments I could have come up with.
“Why do I do this to myself,” I thought.
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