H2 Healthcare

Milton Friedman: “Keep your eye on one thing and one thing only: how much government is spending, because that’s the true tax.” “If you’re not paying for it in the form of explicit taxes, you’re paying for it indirectly in the form of inflation or borrowing.”

The final 2026 US budget is out… One of the great political moves by the left in recent years has been convincing a large portion of America that we don’t already spend the vast majority of our money on healthcare and entitlement programs.

Milton Friedman on why politicians love Keynesian economics: “The theory [of pump priming] was a godsend to politicians who had been grasping at any expedient. Throughout the ages, politicians have been only too willing to spend money.” “Here along came a scientific theory offered under the most responsible of auspices that justified what they had been wanting to do all along. Is it any wonder that government spending has exploded ever since?”

Milton Friedman discusses how to improve America’s public school system: “Education ought to be a state and local matter, not a federal matter. It ought to be a parental matter. The responsibility for educating children is with their parents.” “In order to make it a parental matter, you have to have a situation in which the parents are free to choose the schools their children go to. They aren’t now.” “Today the schools pick the children. Children are assigned to schools by geography, by where they live. Essentially you’ve got a school picking its own children.” “Take the amount of money that we’re now spending on education, divide it by the number of children, and give that amount of money to each parent. We keep on spending that, but spend it in the form of vouchers going to all parents.”

Milton Friedman: “In the long run, government will spend whatever the tax system will raise, plus as much more as it can get away with. That’s what history tells us.” “So my view has always been: cut taxes on any occasion, for any reason, in any way that’s politically feasible, as the only way to keep down the size of government.”

Those magical six words Wisconsin baseball fans hope to hear this October: “Milwaukee, you have a World Series!” The @Brewers won the American League pennant 44 years ago today.

“Higher taxes will not reduce the deficit, except for a brief interval. They will simply increase government spending. That is the lesson taught by past experiences.” — Milton Friedman

We are seeing a total failure of MMT around the globe. QE and deficit spending (after 2008 and during COVID) was basically an attempt at Modern Monetary Theory (MMT). In a nutshell, MMT says that we can print and deficit spend at will without any fiscal or economic complications. So, central banks held interest rates at zero, forcing markets to accept absurdly low rates. At the same time, these central banks printed massive amounts of money and absorbed a lot of this new debt themselves. MMTers said we could do this with no inflation. Clearly they were wrong. Friedman taught us exactly what would happen, and it did. Inflation took off. The result, central banks were forced to raise rates and stop expanding their balance sheets. So far, governments have resisted fiscal sanity and are still running massive deficits even though central banks stopped funding them. The result? In the past 3 months, 10-year bond yields are up 50 bps in the UK, 90 bps in France, 72 bps in the US, and more than 40 bps in Germany. Governments were already too big in 2008, but this crazy experiment over the past 18 years has pushed things toward a breaking point. France proposes to freeze government pay and pensions, and raise some taxes and we should expect more movement toward austerity in other countries soon. MMT is basically Keynesianism on steroids. It didn’t work. The fix is a revival of Austrian, supply-side economics. Smaller governments, lower tax rates, tighter money, and less regulation. Some will say this is a pipe dream. But it is the only way out.