Only government can take perfectly good paper, cover it with perfectly good ink and make the combination worthless.

The quote by Milton Friedman humorously critiques the inefficiency and waste inherent in government operations. He is referring to the way that government often takes resources that could have value (in this case, paper and ink) and turns them into something less valuable or even worthless through bureaucratic processes. Friedman suggests that the government's handling of certain tasks or policies often results in a waste of resources, as opposed to the private sector, which he believes is more efficient and productive in utilizing resources.

Friedman’s comment reflects his economic philosophy, particularly his belief in free-market capitalism and his criticism of government intervention in the economy. He argues that when the government is involved in financial matters, such as printing money or managing public funds, it often leads to inefficiency, inflation, and a devaluation of resources. By using the analogy of paper and ink becoming worthless, Friedman is pointing out that government actions can often diminish the value of resources rather than enhancing them.

The origin of this quote can be traced to Friedman’s long-standing critiques of government spending and economic policies. As a Nobel laureate in economics, Friedman was a strong advocate for limited government and the importance of market-driven solutions. This quote embodies his belief that government interference in the economy often leads to undesirable outcomes, particularly when it comes to managing financial resources.

In essence, Friedman’s quote highlights his belief in the inefficiency of government and the value of free markets. He uses the imagery of paper and ink to demonstrate how government actions can turn something of potential worth into something useless, underscoring his argument for reducing government influence in economic matters.