Principle #16 - GOVERNMENT SPENDING - THREE AREAS: TAX, BORROW, PRINT.
Spending tax revenue is a less efficient use of capital than individual consumers using that same money to make investments. For example, spending tax money on welfare programs is less efficient than individuals or business using that same money to create job opportunities and make those people on welfare more productive members of society. In addition, when the government borrows money by issuing Treasury Bonds, it creates huge debts that will be passed on to future generations. This is a negative influence on the economy because if there was a massive call on these debts, our country would be bankrupt. Printing money to finance more government programs also has a negative influence on the economy. When you print money, you devalue dollars, which creates fiat inflation because that money is not backed by anything.
