Friedman discusses Social Security, deficits, trade, monetary policy, immigration, education and more. Very much worth reading, as always.
(via Don Luskin)
6 thoughts on “Interview With Milton Friedman”
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Some Chicago Boyz know each other from student days at the University of Chicago. Others are Chicago boys in spirit. The blog name is also intended as a good-humored gesture of admiration for distinguished Chicago School economists and fellow travelers.
Friedman discusses Social Security, deficits, trade, monetary policy, immigration, education and more. Very much worth reading, as always.
(via Don Luskin)
Comments are closed.
Brilliant. We can all blog until our fingers fall off, and we will not say one millionth of the intelligent things Friedman says in a few, short simple sentences.
Great stuff – I have always had my doubts about consumption tax but I think this interview is giving me second thoughts.
Friedman can describe concisely the unfairness of taxing an AIDs victim for a retirement he will never see and then with no sense of irony propose raising the age of retirement as a solution to Social Security’s problems. Well, let’s call that the final solution because for every year the retirement age is raised thousands die before retiring.
Fred, the initial retirement age was set in the 1930s precisely for the reason you criticize — most people would be dead before they reached it. It was not meant to sustain people for many years.
Much food for thought here from a man who seems to have a good understanding of how each part of the economy affects the other parts.
I’m not sure though, that I buy the argument that consumption taxes are better than income taxes because savings get taxed twice. Most of Friedman’s points are almost intuitive (once someone brilliant states them) but this one is not.
The problem I have with consumption taxes is that it does not match up personal assets and liabilities properly – a lot like the current social security system. What I mean is that I have an asset (my earning potential) that I convert to cash by doing work. Income taxes require me to immediately use some of that cash to satisfy my tax liability. The amount of this liability is known for the most part so that the market can take it into account when determining the value of my asset.
Consumption taxes are a future liability, the value of which is not known with certainty; i.e. I could do a great job of saving, only to find that after I stop earning income the consumption tax rates go through the roof making me a poor man.
I don’t see how taxing investment income equates to double taxation. In any case, if we don’t like it, we don’t have to resort to consumption taxes to get rid of it.
Fred, you need to understand that the question was “How to keep the Ponzi Scheme running?”