Wednesday, 14 May 2014

QUOTE(S) OF THE DAY: On Taxes and Deficits and the Annihilation of Capital

“Taxes which are levied on a country … for for the ordinary expenses of the State, and which are chiefly devoted to the support of unproductive labourers, are taken from the productive industry of the country; and every saving which can be made from such expenses will be generally added to the income, if not to the capital of the contributors. When … twenty millions are raised by means of a loan, it is the twenty millions which are withdrawn from the productive capital of the nation…
   “It is by the profuse expenditure of Government, and of individuals, and by loans, that the country is impoverished; every measure, therefore, which is calculated to promote public and private economy, will relieve the public distress; …”
- David Ricardo, from chapter 17, On the Principles of Political Economy and Taxation

“[It is said] that the debts of a nation are debts due from the right hand to the left, by which the body is not weakened. It is true that the general wealth is not diminished by the payment of the interest on arrears of the debt … but the principal of the debt—what has become of that? It exists no more. The consumption which has followed the loan has annihilated a capital which will never yield any further revenue. The society is deprived not of the amount of interest, since that passes from one hand to the other, but of the revenue from a destroyed capital. This capital, if it had been employed productively by him who lent it to the State, would equally have yielded him an income, but that income would have been derived from a real production, and would not have been furnished from the pocket of a fellow citizen.”
—Jean Baptiste Say, from Book III, chapter 9, of his Treatise on Political Economy

“Deficits mean future tax increases, pure and simple. Deficit spending should be viewed as a tax on future generations, and politicians who create deficits should be exposed as tax hikers.”
- Ron Paul

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