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Politics : American Presidential Politics and foreign affairs
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To: TimF who wrote (39055)11/25/2009 9:04:39 PM
From: DuckTapeSunroof  Read Replies (1) of 71588
 
"Structural Versus Cyclical Deficits"

Serious STRUCTURAL federal deficits are, of course, what needs to be avoided at almost all cost if we are to maintain the purchasing power of our currency (to say nothing of even worse outcomes then 'losing purchasing power'!)

However, a big word of CAUTION needs to be said about the Keynesian principle of running *temporary* federal deficits during the 'bad times', during the major down portions of business and economic cycles to mitigate against wild extremes and promote and more evenly produce growth....

That can *only* be a net benefit to the nation's economy IF (and here's the catch!) SURPLUSES are run during the top portions of economic cycles, and credit is withdrawn during the 'good times'.

That's the rub.... Never sufficient discipline.
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