Beardsley Ruml, Chairman of the Federal Reserve Bank of New York, said it in Jan 1946. It’s still correct. Added — with thanks to Ed Walker (@MasaccioEW) — to the FAQ page on taxes. Here
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?