For anyone extemporizing and complaining about the current US fiscal deficit, take a quick read on this article penned in 1999... It's a real eye-opener. I would have never guessed that much of this was actual history. To the contrary, I have always been in the "no government debts" camp... BTW, this is the article that Mike Norman was quoting from when he made his attribution error... Fascinating piece, and I don't normally find papers on economics to be fascinating...
Excerpt: "Since 1776 there have been six periods of substantial budget surpluses and significant reduction of the debt. From 1817 to 1821 the national debt fell by 29 percent; from 1823 to 1836 it was eliminated (Jackson's efforts); from 1852 to 1857 it fell by 59 percent, from 1867 to 1873 by 27 percent, from 1880 to 1893 by more than 50 percent, and from 1920 to 1930 by about a third. The United States has also experienced six periods of depression. The depressions began in 1819, 1837, 1857, 1873, 1893, and 1929. Every significant reduction of the outstanding debt has been followed by a depression, and every depression has been preceded by significant debt reduction. Further, every budget surplus has been followed, sooner or later, by renewed deficits. However, correlation—even where perfect—never proves causation. Is there any reason to suspect that government surpluses are harmful?"
levy.org
KJC |
