We like to think our current financial problems are new. But like everything else, they have a history. Of course, in 1957 the problem wasn't measure in Trillions, but Billions and it was enough to cause a lot of sleepless nights. Then as now, the solutions and problems posed were the same - curb government spending, raise taxes - no, lower taxes - no, raise taxes. Slash entitlements, keep entitlements. Cut military spending. Cut Military spending and we'll be weak - no, our terrible Foreign Policy is why we have increased Military spending. On and on.
So on May 5, 1957, as part of the New World radio series on NBC Radio, a roundtable discussion was put together to pose all those questions and find something resembling answers. Taking part were the leading economists of the day; John Nuveen, Robert Eisner, and Milton Friedman.
Milton Friedman: “The Federal Budget, in my opinion, can and should be cut. The budget is big because the government is big. And the government is big partly because it is doing many things, which it seems to me, might be better left to private individuals and to states and municipalities.”
Robert Eisner:” It seems to me that we shouldn’t talk about cutting the budget by eliminating the disgracefully small items for education and welfare. Let’s face the facts, there really isn’t very much to cut in the budget it’s just pittances. Unless we’re going to cut this military budget, and it’s about time that we stop feeling that any figure that’s quoted to us from the Military must be right. We’re all certainly agreed that we want to safeguard our country. We want to make sure that we have a strong adequate defense. But it doesn’t follow that you should simply spend more and more. And no matter how large that figure is that helps our security. We may actually get to a point where you’re spending so much you create a climate in the world that jeopardizes our security.
And fifty-four years later . . . . .
The thing is, the Friedman school of economic thought appears to have historically not worked - but it's still argued vehemently for. Does this go under the heading of Collective Amnesia or the definition of insanity?