A Precis on Public Finance
Tibor R. Machan
In a free country public finance pertains to how the proper tasks of government must be funded. The first issue is what amounts to bona fide public finance. Since the job of government is to secure the protection of the rights of the citizenry, public finance must deal with funding such protection. Courts, the military, police, intelligence services, etc., etc., all of which concern securing the protection of our rights would need to be funded.
Surprisingly, for those who base their public philosophy on tradition, such funding doesn’t require the extortionist policy of taxation (http://philpapers.org/rec/MACNTW).
In our time the doctrine of limited government -- severely limited, as per the philosophy of the Declaration of Independence -- is not favored by the mainstream discussants in the field of public finance and policy. But remnants of it do make their appearance here and there. For my purpose here what needs to be emphasized is that with proper limits on the scope of government, the cost of its functions, the amount of the national wealth required to fulfill its proper purpose, would be far less than what mainstream public finance experts claim. The national debt, for example, would be miniscule compared to what it is now -- indeed, arguably there would be none except in public emergencies.
So, to put it bluntly: restrain government, its job and scope, and you have fixed the country’s financial woes. This is no different in principle from how household finance needs to be managed. Occasional emergencies may warrant borrowing funds, going into debt, but ordinarily staying within the limits of the household’s budget would be the right course.
The details would, of course, need to be worked out over time but the essentials are as I explain here.