Once upon a time there was a King who decided the best
way to keep the people happy would be to create more money and just give it to them
so everyone could afford to buy what they wanted. It wasn’t long before there were lots of goods
to be moved throughout the Kingdom. More
goods than all the King’s horses and all the King’s men could carry. So, the King made the people of his kingdom pay
more for their goods and rewarded his horses and his men accordingly. But the people struggled to pay the higher prices. They begged, bartered, gave up land and even sent
their children to work for the King just to pay their bills.
Ultimately, the people of the kingdom just stopped buying
things period. They decided to make do and
go without. The economy of the kingdom ground
to a halt. This alarmed the King, so he
called an emergency meeting of his Privy Council. The King suggested that perhaps he should again
create more money and give it to the people so they could afford to buy things.
The younger members of the Council thought
this was a great idea and even went so far as to suggest that the King should
consider just paying people not to work.
They advised the King that this would make him very popular with the people.
He would be remembered as a kind and
generous king; and even find favor with God.
Fortunately, the more senior members of the Council explained
economic reality to the King and how the concept of money works in the real
world. Even the Queen respectfully told the
King that creating more money was not the best idea in the first place and just
giving it to the people for producing nothing of value would eventually make
the money…well, it would make the money worth nothing of value. So, the King chose to let economic forces work
Sure enough, as demand for goods fell, so did the prices.
By now there were more than enough of
the King’s horses and the King’s men to carry the goods. Thus, the King allowed the people of his kingdom
to pay lower prices. Eventually the
Kingdom was once again prosperous, and its people were happy. So, the King and his Council decided this was
the perfect time to raise taxes. There
was much that needed to be done throughout the Kingdom and the people would no
“It is a popular delusion that the government wastes vast
amounts of money through inefficiency and sloth. Enormous effort and elaborate planning are
required to waste this much money.” – P.J. O’Rourke