Quote of the Day: On Banking Union

But a banking union just makes the problem worse. Not today, maybe. But certainly tomorrow. What makes government action attractive is the opportunity for the body politic to pool its money to achieve things that individuals cannot achieve on their own. This idea ignores the possibility of voluntary collective action. But more importantly, the romance of this idea ignores the reality that inevitably, politicians are spending other people’s money. One of the simplest and deepest ideas of Milton Friedman is that people don’t spend other people’s money very carefully, especially when they are spending it on other people.

That’s from Professor Russ Roberts at the Café Hayek on proposals for a banking union to solve the EU debt crisis.

Whether it is banking union or fiscal union they are all the same, they ALL depend on the free lunch (Santa Claus) principle or of spending other people’s money.

And this is what makes the touted political solutions unfeasible and unsustainable. The easiest thing to do in this world is to spend other people's money.