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:
“Consider the islands bearing the names of all the saints, bristling with forts like chestnut-burs, or Echinidæ, yet the police will not let a couple of Irishmen have a private sparring- match on one of them, as it is a government monopoly; all the great seaports are in a boxing attitude, and you must sail prudently between two tiers of stony knuckles before you come to feel the warmth of their breasts.”
—Henry David Thoreau (1817–1862)