Uncommon Knowledge: PAY IT BACKWARDS: The Federal Budget Surplus | Hoover Institution: "Peter Robinson: What happened then to change it? That is to say, the incentives, the fundamental institutional structures and incentives, were always there. What happened?
Milton Friedman: What happened was the Great Depression, which--which changed people's views. Before the Great Depression of '29 to '33, the general public vision was that the government was a necessary evil, and that you should rely on the private market. The Great Depression was wrongly attributed, in my opinion, it was produced by government mismanagement but, it was wrongly attributed to a failure of the capitalist system. And public attitudes changed drastically as a result of the Great Depression. From regarding the government as a necessary evil, they regarded--they came to regard the government as the cure to all problems, as the answer to all problems. And that set in motion, beginning with FDR's New Deal, that set in motion a process under which government has been incr--incrementally growing from then on."
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