Thursday, February 22, 2007

The Case Against Balanced Budgets
I'm not sure Robert Reich is paying proper heed to the political and common-sense value in seeking a balanced budget. I also think it would be incredibly stupid for a Democratic Party that has been pushing against Republican deficit spending to suddenly not mind now that they control Congress. But I don't doubt his economic perspective.
The federal budget is just an accounting convention. And a lousy one at that. It doesn't distinguish between spending to pay off obligations made in the past, spending intended to make us better off today and spending to make us more productive in the future.
No one in their right mind should worry about balancing this silly agglomeration.

We should worry instead about putting aside enough to deal with past obligations, devoting no more than we can afford to current needs, and making adequate future investments. Even if we have to borrow in order to make them.

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