‘Let’s Try Capitalism’

Published April 2, 2012 1:59pm ET



In a book review of White House Burning titled, “The Endless Spending Spree: America’s debt is $15.6 trillion and growing. Instead of raising taxes, here’s an idea: Let’s try capitalism,” James Grant writes:

“From George Washington to Dwight D. Eisenhower, the national debt tended to grow in wartime and shrink in peacetime. Because the dollar was generally convertible into gold or silver at a fixed and statutory rate, the central bank, when there was a central bank, couldn’t just materialize money as the Federal Reserve does today. You had to dig the metal out of the Earth, or entice it into American vaults with money-friendly financial policies. The Treasury could borrow, all right, but not without limit. Wars aside, the government paid its way like a man with a debit card.

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