Milton Friedman Essay Research Paper Dr Friedman

Milton Friedman Essay, Research Paper

Dr. Friedman insisted I use national income data (instead of GDP) for measuring economy size. He continually stressed the necessity of recognizing the add-on load to the economy of regulatory compliance costs. And, don’t forget to include your data sources, he said. Comment to assist your readers, but show them the hard data as your base. And, don’t get side-tracked by what other nations are doing – - make all comparisons to America’s own history. Good advice.

In his letters Dr. Friedman included comments such as: “I am impressed”, “Very well done”, “Your objective is one I fully endorse”, “your charts and analyses are excellent”, “I congratulate you and applaud your continuing effort”, “I certainly commend you for the Grandfather Report you have produced and for the imaginative way in which you have displayed data highly relevant to very important issues”, etc. – - continually motivating and leading a slow (but, persistent) ’student-admirer’ onward. Who says retired persons can’t learn. Well, that depends on the motivator. Dr. Friedman is one of the best, in this regard.

As the compilation of data with 90 charts matured to reveal clear pictures of macro trends, I was stunned at the findings. I assumed a responsibility to make this information available to other grandparents, parents and youth to increase general awareness – - so that more people can view for themselves the results of this effort. I believe that “Knowledge is Power – - if you have it.” Believing ‘a picture is worth a thousand words,” an easy-to-read format together with color graphics of long term trends backed by hard data from reputable sources was developed. The report was given a name: THE GRANDFATHER ECONOMIC REPORTS, a series of picture-reports showing economic issues facing families and youth, compared to prior generations – and published on the world wide web at http://mwhodges.home.att.net/ . It wasn’t long before the email in-box was out of control. Parents and grandparents sent data to be added. Students wrote and compiled their own research papers. Economic professors use the information in their classes and exams. Some supporters of centralized power and debt complained. I found an insatiable appetite across our nation for reliable information that is easy to understand and which carries historic perspective. A small public information service was born, at no cost to the public, offering a unique view of economic trends – - that can be understood by most regardless of their education attainment. Its possible benefit may never be known.

The major concerns which emerged from my research are that our nation is more government-spending-dependent and more debt-dependent – - than ever before – - and that we have shifted from individual responsibility, small government and minimal debt to granting government responsibility (some call this ‘collectivism’) for many areas not intended by our nation’s founders.

OBJECTIVE: If you ask, “How much of our economy’s national income should be controlled by federal, state and local government and how much federal debt should be allowed in peace-time.” Most will answer, “About 20% of the economy for spending, with zero debt.” But, today’s government consumes more than twice that much – approximately 42% of the economy – - and federal debt is $5.6 Trillion. The objective of this report is to address this issue – - and determine spending and debt targets, with an eye to historic precedent – -and develop a master plan to acquire the target.

SUMMARY: This report, with history as a guide, will point toward a reduction of federal government spending from 27% of national income to 12%, and state & local spending from 15% of the economy to 8% (bringing said combined spending close to that achieved prior to WW II) – and, federal debt from $5.6 trillion to zero over 20 years. Said reductions will be accomplished by spending reductions (primarily by cuts and privatization in the social arena). In addition, any budget surpluses created by today’s excessive tax rate/revenue shall be refunded to citizens via tax rate cuts.

The approach taken here in establishing targets is to do so on the spending ratio side, instead of the tax/revenue side. This is the proper approach, as spending ratio reductions MUST be the target. However, politically speaking it is more difficult to implement spending program cuts necessary to realize the approximate 60% reduction required per the above table. Big government proponents are a powerful force, and will claim every dollar of any spending cut is actually a plan to starve children and old people. This has been an effective argument in the past, resulting in huge government. It will be used as a tactic time and again. So, spending reduction plans are one thing. How to implement is another.

Nobel Laureate Economist Milton Friedman (in his book, ‘Bright Promises, Dismal Performance’): “I favor tax cuts. Our basic long-term need is to stop the explosive growth in government spending. I am persuaded by the experience of decades that the only effective way to do so is limit government revenue, by cutting taxes – - at any time for any excuse in any way. The reason is that government will spend whatever the tax system raises plus more – - but not an indefinite amount more – - as the out-cry for deficit spending will limit this. The most effective way to