Government Deficits: Good or Bad?
Whether government deficits are good or bad cannot be decided without examining the specifics. Just as with borrowing by individuals or businesses, it can be good or bad. If the government borrows (runs a deficit) to deal with a severe recession (or depression), to help self-defense, or spends on public investment (in infrastructure, education, basic research, or public health), the vast majority of economists would agree that the deficit is bearable, beneficial, and even necessary. If, on the other hand, the deficit finances wasteful expenditure or current consumption, most would recommend tax cuts to stimulate private investment, transfer cuts, and/or cuts in government purchases to balance the budget.
Read more about this topic: Deficit Spending
Famous quotes containing the word government:
“During the first formative centuries of its existence, Christianity was separated from and indeed antagonistic to the state, with which it only later became involved. From the lifetime of its founder, Islam was the state, and the identity of religion and government is indelibly stamped on the memories and awareness of the faithful from their own sacred writings, history, and experience.”
—Bernard Lewis, U.S. Middle Eastern specialist. Islam and the West, ch. 8, Oxford University Press (1993)