[hheathman]

I’ve read Hazlitt’s aforementioned work. I found it informational and easily understandable.

I did have a general question. Hazlitt’s premise is that we have to look at that which is seen and that which is unseen. The government spends money on wars, bridges, government programs, etc. which is what is SEEN. It gets this money from extracting tax dollars from us (amongst other methods). The loss of purchasing power from the tax payer is that which is UNSEEN. Presumably, were we not parted of our dollars the taxpayer could have spent it much more judiciously.

The assumption is that had the government not spent our tax dollars on X, the taxpayer would retain those dollars and spend it on something of his choice. Does this only hold true when the government is running a balanced budget or a surplus? Meaning, right now if we were to end our wars and slash a bunch of government programs, would we be taxed less and have more purchasing power or would we be taxed the same and gain no purchasing power despite fewer government expenditures because the servicing and paying down of the debt still remains? Is this a question of policy or economics?

[jmherbener]

Hazlitt’s point is that one cannot justify government expenditures by pointing to the benefit they do, a bridge is built, 100 people are employed, etc. One use of resources can only be justified by showing that it is more valuable to people than their best alternative use. This is precisely what entrepreneur demonstrate each time their production earns profit. Government cannot do this because it raises revenue through coercion, i.e., taxation.

It follows that the direct burden of government on society is the extent to which it diverts resources from private hands into its own. If government expenditures for wars and other programs that control the use of resources were slashed and the resources returned to private hands, then society would be better off. If the reduced expenditures were matched by reduced taxes, it wouldn’t affect the expenditures made to service the debt. (Expenditures to service the debt are those made to pay interest on the debt. There is neither a “sinking” fund to pay off the principle nor any proposals to pay down the debt by running surpluses. If there were, then total expenditures and taxes would not necessarily fall.)

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