FRIEDMAN: If you're a Congressman, what is
that you're aiming for?
You're aiming to behave in a way which will
get you re-elected.
Now it turns out that it's easier to get re-elected,
on the average, by spending other people's
money than it is by saving it.
Let me put that more specifically.
Here's what looks like a very attractive spending
program.
Some people are going to benefit a great deal.
You and I are going to pay ten cents extra
in taxes a year to pay for it.
Are you going to go down and lobby your Congressman
not to pass that spending program?
Not at all... but the people who are going
to benefit greatly from it.
They're going to be down there lobbying for
it.
Let me give you a very, very simple example.
Every housewife in this country pays four
to five times the world price for a pound
of sugar.
If she were able to buy that sugar on the
world market, it would cost a fifth of what
it now costs.
Why can't she?
Well, there are a few hundred thousand farmers
who grow sugar beets, some who grow cane for
the sugar; between them they have been able
to persuade the Congress to put a quota on
the imports of sugar from abroad.
Now those sugar quotas do the consumers a
great deal of harm.
They help the one hundred, two hundred thousand
maybe, I don't know what the exact number
is, maybe it's more, maybe it's less, but
a very small number who bring great pressure
to bear on the Congress to keep the quotas.
Once those quotas are in effect, once sugar
has become expensive, it turns out that there
are more special pleaders because then it
turns out that with sugar that expensive,
natural sugar, various kinds of artificial
sugar like sucrose made from corn can be produced
more cheaply than the artificial price of
the sugar, though more expensively than the
world price.
The result of that is, is that the producers
of that kind of sucrose join the lobbyists
who are lobbying for an import quota.
And the end result is that the consumers are
quiet, the producers and those who are affected
are loud and it gets passed.
Now what's Congress going to do about it?
It doesn't like the deficit, but in fact,
the easiest way to get out of that deficit
is to raise taxes rather than to lower spending.
But if you listened to what I said before
that doesn't do any good from the point of
view of the consumer.
You pay for it one way or another.
The real question is: how much are you required
to spend one way or another, directly or indirectly
by taxes, by lending, by inflation?
What fraction of your income are you required
to devote to having other people spend it,
supposedly, on your behalf?
