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Politics : The Castle -- Ignore unavailable to you. Want to Upgrade?

To: Neocon who wrote (336)	11/12/2002 9:58:46 PM
From: Lazarus_Long	Read Replies (3) \| Respond to of 7936

debt service obligations are manageable But why have the debt at all on a long term basis? If it is "manageable", why not just pay it off? The same principle that applies to a family budget would apply to a national budget: all your paycheck (less taxes, which gov't obviously don't pay) is available for your needs, rather than just what is left after "debt service". So if a gov't has debt and pays it off, it can then either start new programs or reduce taxes. Gov't budgets used to be routinely balanced. The federal budget was supposed to be balanced except in time of war (and depression, after FDR). Many cities and some states require their budgets to be balanced- -and do it. Many states require lower level governmental entities to have balanced budgets. whether deficits are bad You doubt they are long term? If you run a deficit long term, them you have steadily increasing gov't debt, requiring more and more taxes to pay the debt service. Ultimately, the gov't will either inflate the currency or go bankrupt.