Nor should the argument seem strange that taxation may be so high as to defeat its object, and that, given sufficient time to gather the fruits, a reduction of taxation will run a better chance than an increase of balancing the budget.
Interpretation
High taxation can hinder economic progress, while reducing taxes might better balance the budget over time.
In this quote, John Maynard Keynes suggests that excessively high taxation can be counterproductive, ultimately defeating its purpose of generating revenue. Instead, he posits that reducing taxes could lead to more sustainable economic growth and ultimately a more balanced budget if given sufficient time for its effects to manifest.
In practice
In a speech about fiscal policy, one might reference this quote to argue the importance of balanced taxation.
As time goes on, I get more and more convinced that the right method of investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes.
The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is generally understood. Indeed, the world is ruled by little else.
The disruptive powers of excessive national fecundity may have played a greater part in bursting the bonds of convention than either the power of ideas or the errors of autocracy.
We will not have any more crashes in our time.
This long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.
The book, as it stands, seems to me to be one of the most frightful muddles I have ever read, with scarcely a sound proposition in it beginning with page 45 [Hayek provided historical background up to page 45; after that came his theoretical model], and yet it remains a book of some interest, which is likely to leave its mark on the mind of the reader. It is an extraordinary example of how, starting with a mistake, a remorseless logician can end up in bedlam.
The rich are always going to say that, you know, just give us more money and we'll go out and spend more and then it will all trickle down to the rest of you. But that has not worked the last 10 years, and I hope the American public is catching on.
It turns out that advancing equal opportunity and economic empowerment is both morally right and good economics. Why? Because discrimination, poverty and ignorance restrict growth. We know that investments in education, infrastructure and scientific and technological research increase growth. They increase good jobs, and they create new wealth for all of us.
In America, people with lots of money can easily avoid the consequences of bad bets and big losses by cashing out at the first sign of trouble.
Economists love to talk about incentives, but the bottom line is that people hate being controlled or manipulated, even when done through voluntary institutions. This is one of the most important tensions in capitalism.
As the science of economics...exploded the fallacies of every brand of utopianism, it was outlawed and stigmatized as unscientific.
The natural effect of low interest is to increase trade and industry; because undertakings of every kind can be prosecuted with greater advantage.
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