THE PROGRESSIVE FEEDING FRENZY
IN ANY SYSTEM of social accounting, it is necessary to reconcile revenues with expenditures. Private firms do so because they fear insolvency and bankruptcy. Public institutions don’t have the option of bankruptcy, so they invoke three related strategies to avoid the inevitable: raise taxes, print money, or incur debt to meet their obligations.
Done prudently, it is possible for governments to keep their books in balance. But not when these three tools are in the hands of
