Avoiding present taxes implies offsetting future taxes when interest or principal is due. Of course the government’s ability to borrow depends crucially on its power to tax. This is what the admired art of governing comes down to. That’s why that program won’t fly.Īs Jean-Baptiste Colbert, the finance minister under Louis XIV, notoriously put it, “The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.” You can see the advantage to politicians if they can cut way down on the hissing by borrowing what they’d otherwise have to obtain by plucking. Thus forbidding borrowing and related central-bank inflation would put a lid on spending. They might scrutinize spending programs more closely if they paid the full price out of pocket. Borrowing tends to make people more tolerant of bigger government than they would have been otherwise. If the politicians had to extract every dollar they wanted to spend directly from the taxpayers, they might have a revolt on their hands–a bad career move for sure.
The government’s attraction to borrowing is hardly a mystery.
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