Russ Roberts: evaluation

Transcript context

…Yeah, but say that’s all true. Can the government just spend a lot more money and borrow, and we’ll just grow out of the debt, not much crowding out? Well, it depends on what the government spends the money on. I’ve always felt that the real cost isn’t the interest payments, but the activity of the government. If the government just transfers, which is, I think, probably not so distortionary relative to doing stuff, maybe that’s okay. But I think government does a lot of stuff that means slower consumption for the rest of us, except the people who are the beneficiaries. Government — if they don’t spend the money wisely, if they dig holes and fill them back in, I don’t think that’s a good idea. I think the proper tax that the government is taking on the private sector is the amount it spends, not what it borrows or what it taxes. We have two ways to finance government: taxes today and taxes tomorrow. The mix is not as important to me as what we do with the money that government actually spends, unless, of course, we go to the point of bankruptcy, in which case, that’s a whole different story. And I think it’s bizarre — to pick on our profession again — it’s bizarre how many economists are willing to say it doesn’t matter. It doesn’t make sense to me. If government spending had to be increased by, say, 20 percent, what would you spend the money on?…

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