Oldham, C.H. 'The economic interests involved in the present war'. - Dublin: Journal of the Statistical and Social Inquiry Society of Ireland,Vol. XIII Part XCV, 1914/1915, pp269-280
Journal of The Statistical and Social Inquiry Society of Ireland Vol. XIII Part XCV 1914/1915
Adam Smith, in his final chapter, treats of Public Debts;
he points out why the sudden and great expenditure on
warfare is always met by borrowing instead of by increased
taxation: "By means of borrowing," he says, "the
governments are enabled, with a very moderate increase
of taxes, to raise, from year to year, money sufficient for
carrying on the war; and by the practice of perpetual
funding, they are enabled, with the smallest possible in
crease of taxes, to raise annually the largest possible sum
of money." He proceeds to give his well-known argument
that it would, in the long run, be much more
economical to the community to meet war expenditure by
taxes raised within the year rather than by funding. I
do not now enter on that argument. War expenditure
has always been met by borrowing, and during the continuance
of the war the system of funding has great immediate
advantages. It is only after the war - after the money
has been expended - that we discover, when it is too late,
the greater economy of the other system.
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