Originally published 04/28/2013
Denarius of Sabina Augusta, Roman Republic era. Credit: Dartmouth College.Today, legislators facing budget deficits must decide the degree to which to cut spending, increase taxes, or borrow. All three can have negative effects on the economy and legislators’ individual prospects for re-election. Gridlock has resulted on more than one occasion.Until a few centuries ago, governments regularly resorted to additional fiscal techniques. One was to pillage other countries. That does not work well anymore because most wealth today takes the form of flighty human capital, not easily appropriated physical stuff. Moreover, wars have grown too expensive and too destructive to make them paying propositions.