why shouldn't a government balance its budget?

Answer 1

Deficit spending is an economic maneuver to stimulate the economy.

Answer 2

A balanced budget is a Good Thing but sometimes a deficit is better. There are two ways to balance a huge deficit like we have now: huge tax increases, or huge reductions in government services. Would you agree to have your federal tax doubled? Or would you prefer to have the entire federal government, apart from the Pentagon and Social Security, shut down for a year? Because that is just about the choice you face if you want a balanced budget right now. Since very few people want either, we have to borrow the money and pay interest, instead.

In addition, running up a deficit may be the best thing to do when the country is in a depression, like the one that began in 1929. If business can't solve the problem of unemployment, then perhaps it's better for the government to try, rather than to face a revolution of starving and unemployed citizens.

Answer 3

For any type of economic expansion, be it public or private, there needs to be borrowing. Corporations do it in the form of bonds or selling shares. Governments do it in the form of treasury notes.

Government is able to take on more risk than private individuals or companies. Therefore, in order to build something like the US highway system, requires the federal government to go into debt to create the economic beneftis that the highway system provides. Private corporations couldn't do this.

So to the extent that the governments debt stimulates economic growth, it is a good thing. Even though the US government is the worlds largest debtor, the US economy is the worlds largest economy - by a very long shot. US GDP per capita is enormous when compared to most other countries, and the US enjoys a standard of living well above the world norm.

So the collective risk associated with going into debt is mitigated by the fact that the entire US citizenry shares in that risk, so the interest rates charged are the lowest in the world and we are getting a good "bang for our buck" by going into debt..

Answer 4

Honestly, I don't see why they should, either. Who would call the loans in? The banks should know that if they do that, the economy would suffer and so would their business. So, I just don't see what the big deal is. That said, I am definitely not an expert in this stuff so I may be overlooking several important points.

Answer 5

to strive to be anarchistic

Answer 6

There is no reason!