‘Budget deficit hoo-ha is about 0.5% of GDP‘, The Conversation, 20 December 2016
A useful corrective to the mainstream media-political class herd mentality that gives too much profile to deficit and surplus and not enough to what should be the realities of fiscal policy. We have given the reference an additional tag, ‘Using and abusing history’, because it highlights a prime example of how nonsense gains currency in political debate.
National governments do not, and should not, behave like a private household. They do not have to balance their budget. Their responsibility is to maintain full employment and keep inflation in check. Balancing a budget is not a goal and is actually irresponsible if it leads to depressed growth and the loss of jobs. Commentators who criticise the government for not having a credible pathway to budget surplus should explain themselves. What is intrinsically valuable about a surplus?