29 de Mayo de 2010

This high degree of cyclical sensitiveness of State budgets observed during the present depression is the result of a rather recent development. If we look back at earlier depressions, it is remarkable how little the public finances have been affected. In England good examples are provided by the severe crisis of 1857, which left almost no trace on the budget and the long depression of the seventies, which was even accompanied by budget surpluses which were so considerable that it was possible steadily to lower the income tax (from 6d. in the pound in 1872 down to 2d. in 1875). The reason for the change from those happier days to the present time is, of course, to be found in the fact that the percentage of the national income claimed by the State has tremendously increased, especially since the Great War, and this, in turn, is an expression of the strikingly increased importance of the State in all its activities and of the growth of interventionism in economic policy.

Wilhelm Röpke, Crisis & Cycles, 1936, p. 143