Should Government Balance The Budget?

We hear a lot that government budgets need to be balanced “like a household budget” that is decided “around a kitchen table.”

To balance the budget government has to either tax us more or spend less on things that make our lives better. That takes money out of circulation and does us no favors.

With less money in circulation businesses and households have to turn to the banks to borrow. And they have to pay interest to those banks.

Balancing the budget causes the private sector to turn to the banks and go into debt? The “financial sector” makes big bucks from that while the rest of us have less? Hey, wait a minute… who is pushing this “balance the budget” nonsense?

Trump’s Budget Director Explains MMT (Sort Of)

Atrios had a nice catch this morning. Trump’s Budget Director Mick Mulvaney explained that our government needs to run budget deficits to grow the economy.

Atrios linked to a Bloomberg Politics piece, The GOP Tax Plan Is Already Hitting Speed Bumps, that quotes Mulvaney,

White House Budget Director Mick Mulvaney is signaling similar flexibility, saying on CNN Sunday that decisions about deductions remain up in the air as “the bill is not finished yet.” He took it a step further on Fox News Sunday, by adding that a tax plan that doesn’t add to the deficit won’t spur growth.

“I’ve been very candid about this. We need to have new deficits because of that. We need to have the growth,” Mulvaney said.

Budgets that don’t add to the deficit won’t spur growth.

So there’s that.