There’s a gaping hole in all the balanced budget proposals.
Basically, the people who propose a balanced budget refuse to allow a government savings account.
Look, a lot of people don’t get the abstractions necessary to understand when macro differs from micro. They can’t see why, if deficit spending for families is bad, deficit spending for governments can be good. But this is a different issue.
See, one thing the family can do (to deal with future bad times) is build a reserve — to have a savings account. But the balanced budget folk WILL NOT TOLERATE a savings account in the federal government. Some states have them, and even there a lot of people object. “If you’re getting more money than you need for the year, you need to give it back.” “What if next year is bad?” “Doesn’t matter.”
So the next time you see someone talk about a balanced budget for the federal government – a “deficit reduction plan” – ask them if they’re in favor of the government having a savings account for emergencies. Then ask them how much – and make sure you ask if that’s enough to deal with war or major recession.
Odds are, what really bothers them is a classic issue – “I pay too much in taxes.” That being the case, logical reasoning just doesn’t matter.