Deficit Hysteria: A Common Sense Look at America's Rush to Balance the Budget
The political consensus in the United States today is that the nation must avoid deficit spending. But as virtuous and unassailable as that goal sounds, it has fallacies and dangers. In a lucid, nontechnical writing style, Benavie shows that deficits can be either good or bad and explains how to tell the difference. Deficits, or government borrowing, can be beneficial to the nation's economic health, he shows, in three main ways. When the economy slumps, a deficit is automatically created and helps to reduce the severity of the recession. When the economy is seriously depressed, boosting the deficit may be the only cure, and deficits supporting such investments as basic research, cleaning up toxic waste, and rebuilding inner cities are crucial to the economic health of future generations. Preventing such borrowing would be comparable to preventing one's family from borrowing money to buy a house or to put a child through college.
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Alan Blinder Alice Rivlin American Politics assets automatic deficit balance the budget balanced budget amendment Baumol and Alan benefits Benjamin Friedman billion boost Budget Deficits Budget Outlook Budgets and American capital budget cause Chapter Congress Congressional Budget Office consumption cost current budget debt-GDP ratio deficit hawks deficit hysteria deficit increased deficit reduction deficit spending deficit-GDP ratio dollar Economic and Budget Economic Policy Economic Report economists example federal deficit federal government Federal Reserve Bank fiscal policy fiscal stimulus foreign future standard future tax government borrowing government spending growth Heilbroner and Peter Ibid income inflation rate James Savage Maastricht MYTH Nouriel Roubini Paul Samuelson Peter Peterson Politics by James President Clinton private investment productivity public debt public investment Reagan recession Republicans revenues Robert Eisner Robert Heilbroner Social Security standard of living structural deficit surplus total demand total spending Treasury trust fund unemployment William Baumol William Nordhaus