ECONOMIC OUTLOOK-As Good as It Gets

Discussion in 'Economics' started by easyguru, Jan 5, 2004.

  1. A different perspective on budget deficit.

    http://www.aei.org/publications/pubID.19659/pub_detail.asp
    The loudest cries of criticism have been reserved for the sharp transition from a U.S. budget surplus of over $200 billion in the 2000 fiscal year to a $380 billion deficit in 2003. Conservatives and liberals alike are already decrying an expected budget deficit of $500 billion in the current fiscal year. Criticism of rising budget deficits, an old habit among would-be policy wonks trying to sound profound and prudent, is just silly at this point. It would be like criticizing firefighters for pumping half the water out of a pond to put out a fire. Sure, there is less water in reserve for another fire, but why have the water there in the first place if you don't intend to use it to put out fires? Going from a budget surplus of 2 percent of GDP to a deficit, still below 4 percent of GDP, is appropriate in an economy with excess capacity, especially when much of the swing comes from two rounds of demand-boosting tax cuts that simultaneously improve resource allocation.
     
  2. What were the budget deficits or surpluses for:
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