Quote:
Originally Posted by SebC
Balanced budget legislation is a terrible idea: governments should run deficits in slow economic periods to stimulate the economy and get required infrastructure at lower prices than at cycle peaks when costs are higher. Ironic, but perpetually balanced budgets actually lead to higher spending for a given service level. Nobody benefits from that.
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While you may have a fair point on principle, in practise we have seen that no government has ever been able to achieve this policy.... instead spending when times are bad, and spending more when times are good. Governments across the world are terrible at controlling spending, it just isn't a reasonable expectionion.
As such, the only plausible alternative is to limit spending to a defined amount of growth. Yes, we may see better return on that spending in one year compared to the next, but it is the only reasonable way to restrain government from unnecessary debt financing.