Quote of the Week
(from the Writings of Professor Sennholz)

The Week of June 3, 2007

Off-Budget Spending
"Politicians and officials wax eloquent about the need for deficit reduction but continue to spend as if there is no tomorrow. Simultaneously, they have built several avenues for going off-budget. They may simply remove certain federal activities from the U.S. Budget or create new off-budget entities to carry out federal programs. They may conduct policies through privately-owned but government-sponsored-and-controlled enterprises. And they may conduct numerous government loan-guarantee programs which channel private credit toward federally selected programs. All these avenues of escape make government activity appear much smaller than it actually is.

No constitutional amendment, law, or regulation can impose integrity and frugality on politicians and officials with the backdoors left wide open, giving rise to countless off-budget agencies and public enterprises. The possibilities for concealment, deception, pretext, sophistry, stratagem, and plain trickery are endless."

Reflection and Remembrance, 1997, p. 78.

The Week of May 27, 2007

Members of Congress
"Many members of Congress are attorneys at law, officers of a court of law and experts in legal proceedings. They think in terms of man-made law and directive; they have difficulties conceiving of inexorable principles of the market, of the old American ideals of natural right to life, liberty and property, and of the need for constitutional limitations of government. Wiith their minds disposed in the ways of government programs and benefits, they approve of common dependency in such matters as healthcare either through Medicare, Medicaid, or mandated employer health insurance. They endorse dependency on Social Security when people retire, and parent dependency on government to educate their children. In fact, many Americans now prefer government care over the freedom to live independent lives; many have lost the ability to be free and independent."

Sowing the Wind , 2004, p. 131.

The Week of May 20, 2007

Labor Income:
"I know some people who are always unhappy about their work, especially about their employers and their fellow workers. They go through life complaining and protesting about their working conditions. They would like to be any where except at work. They are forever unhappy about the compensation for the work they grudgingly perform. Continously asking for higher pay and lighter work, they may even join a labor union which seeks to enforce their demands. They just do not understand that labor income is not determined by what we demand from others, but by what we do for others."

Man Must Work, 1995, pp. 4, 5.

The Week of May 13, 2007

Budget Deficits:
"Federal deficits, which are chronic, and the pyramids of federal debt, which are collosal, are children's burdens and handicaps. Bent on benefits, entitlements, enjoyment now, the present generation prefers to consume more than it produces; it eats into the productive substance and leaves the bills to its children. Demanded by voters, built by politicians, and administered by bureaucrats, even many of its public works constitute self-indulgence that waste scarce resources and consume productive capital."

Economic Commandments, 1990, p. 40.

The Week of May 6, 2007

Labor Costs:
"While governments and unions are forever raising labor costs and causing unemployment, business is forever adjusting to prevent the unemployment. When the federal government raises its Social Security exactions and state governments boost unemployment compensation taxes, which may significantly raise labor costs, business is straining to prevent the unemployment through cost adjustments. It may seek to offset the mandated costs with other cost reduction. In particular, it may reduce fringe benefits, delay inflation adjustments, elicit greater effort on the part of workers, and otherwise use labor more productively. Whenever and wherever business is successful in offsetting the boost in labor costs, it succeeds in preventing threatening unemployment. If laws, regulations, and work rules prohibit the necessary cost adjustment, business has no choice but to discharge loss-inflicting workers. If it is unable to remove the employment obstacles erected by government or union, it is forced to dismiss the labor that fails to surmount the obstacles."

The Politics of Unemployment , 1987, p. 296.

The Week of April 29, 2007

The Underground Economy:
"There is a ready underground market for services by people drawing unemployment compensation. They are offering 'home-related' services including lawn care, painting, carpentry, plumbing, electrical work, cleaning, washing, cooking, and babysitting. Surely some service workers dutifully report their earnings to the Office of Employment Security and consequently suffer benefit reductions. But many fail to report their wages to their claims interviewers and neglect to inform the IRS. They prefer to labor in the underground economy.

Urban slums are centers of transfer and strongholds of the underground economy . They are the homes of immigrant workers from foreign countries or from rural parts of the United States, of blacks from the rural South, or other minority groups, such as Mexicans, Puerto Ricans, and Orientals. Labor legislation and economic regulation render them useless and unemployable; the underground economy welcomes them with many jobs and entrepreneurial opportunities."

The Underground Economy, 1984, p. 19.

The Week of April 22, 2007

Legal Tender:
"According to most dictionaries, legal tender is any kind of money which by law must be accepted when offered in payment of a debt expressed in the country's money unit. Such a legal definition shows no understanding of the moral implications and economic consequences of the principle of legal tender. A more meaningful definition that would reveal its ominous implications would read: 'Legal tender is the legal obligation to accept Federal Reserve notes at their nominal value, no matter how much their purchasing power has fallen or is expected to fall,' or 'legal tender is the legal obligation, enforced by courts and police, of every creditor to accept Federal Reserve notes of uncertain and usually depreciating value.'

The inscription, 'This note is legal tender for all debts, public and private,' which appears on all Federal Reserve notes, should read: This note, regardless of its value, may be forced on anyone in settlement of all debts, public and private.' Legal tender power is for the central bank what the power to tax is for the Internal Revenue Service."

Money and Freedom , 1985, p. 24, 25.