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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: DuckTapeSunroof who wrote (39068)	11/25/2009 10:19:26 PM
From: TimF	Read Replies (1) \| Respond to of 71588

hat 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* Not necessarily. You can have a deficit continuously as long as the debt is growing slower than the long run growth rate of the economy, and it doesn't really cause a problem in terms of looming fiscal crisis or growing burden of servicing the debt. But that doesn't apply to our current situation. The problem is that the deficits during the downturns have become large rather than moderate, and during the upswings have become moderate rather than small or non-existant, so unless things change the debt will grow faster than the economy. Also we have the looming problems of runaway entitlement costs. And there is the point that if you aim for swings between moderate and tiny deficits, its easy enough to actually get swings between large and moderate deficits. If we aim for swings between moderate deficits and a surplus, then overshooting is much less likely to cause a problem. That's the rub.... Never sufficient discipline. That much is true.