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cthulu2016

(10,960 posts)
Wed May 23, 2012, 04:19 PM May 2012

What would the benefit of balancing the budget be?

It's always useful to ask what is supposed to result from a policy.

What benefits, if any, would we see if the budget was balanced today?

Would GDP be higher? Would interest rates be lower? Would unemployment be lower?

Not that I can see. Not in today's economic reality. GDP would be lower. Unemployment would be higher. And I don't know how much lower interest rates could plausibly go... or why a balanced budget in a depressed economy would affect them anyway. There is no current excess government demand on credit. The government is borrowing more, but the private sector is borrowing much less so there is no high demand for credit on any level.

Would taxes be lower? No. Would there be more government services? No.

So what on Earth is the ostensible benefit?

When someone says we need to balance the budget in today's environment it is fair to ask, "why?" It isn't a rhetorical question, it is a real policy question.

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What would the benefit of balancing the budget be? (Original Post) cthulu2016 May 2012 OP
Nil, Sir: Zip, Nada, None.... The Magistrate May 2012 #1
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