…who you gonna trust?
Paul Ryan on credit, debt and the wealth of nations:
You can’t spend, tax, regulate and borrow your way to prosperity.
[Tweet by @PaulRyanVP (little ahead of yourself there, wouldn’t you say? –ed.) at 11:40 on Wed. 10 Oct.]
Or — perhaps you can.
If interest be not yet low enough for the advantage of trade and designs of setting the poor on work…as divers understanding men think it is not…the only proper way to lower it is more paper credit till by trading and business we can get more money.” (Italics added. Any invidious shadow that might fall upon the aspirant to the Vice Presidency is wholly intended.)
[Newton to John Pollexfen, MP and member of the Board of Trade, 1700.¹]*
In fact, of course, modern capitalism, the rise to power and great wealth of first Britain, and then ourselves and an increasing proportion of humanity, turns on the creation of credit, the ability of nations and individuals to borrow today against tomorrow’s increase in capacity, invention, and comfort. It is precisely by paying Tuesday for the (means of making) hamburgers today that the whole system works. If Paul Ryan and Mitt Romney have their way, we will slow our growth as a nation and as individuals, families, circles of friends will suffer the consequences in diminished lives and opportunities. (That such loss would fall more on the mass of us than on those who recline at ease in Mr. Romney’s tax bracket is, of course, something that Adam Smith understood very well too — but that discussion is for another post.)
And if you don’t believe me? Take it up with my man Izzy:
But be careful — he really was a tad smarter than young Paul.
¹quoted in G. Findlay Shirras and J. H. Craig, “Sir Isaac Newton and the Currency” The Economic Journal, Vol. 55, No. 218/219 (Jun.-Sep., 1945) pp. 230-231.
*I’d be failing my Galtian duty as a profit maximizer if I didn’t mention that I discuss Newton’s role in coming up with new conceptions of money in my book Newton and the Counterfeiter, available at Amazon and wherever books are sold (also as an audiobook, where my sales are, alas languishing).
Images: Marinus van Reymerswale, The Money Changer and his Wife, 1541.
Sir Godfrey Kneller, Portrait of Isaac Newton, 1689.
Cross posted at Inverse Square.