Theories on balancing the budget to avoid economic distaster…?





I'm looking for some substantiated theories by respectable figures. I'd prefer online sources, and also I'd prefer essays or articles, not full length books. I'll also take any theories you have, as long as they are thought through.



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2 Responses to “Theories on balancing the budget to avoid economic distaster…?”

  1. ribakovs says:

    Their are no theories or papers that say balancing the budget will avoid disaster, however most economics believe that running chronic deficits is not a good for long term growth. That government borrowing “crowds out” private investment is a standard part of economic theory, and is in any textbook on the subject.

  2. xdenied says:

    Just to piggy-back on Meg, who has answered above…Not only is there no theory that balancing the budget will avoid disaster, Keynesian counter-cyclical theory necessitates creating a deficit through government intervention during times of economic crisis.FDR’s New Deal fundamentally failed to achieve its goals because Roosevelt himself was firm on balancing the budget. It was only the deficit spending of WW2 that pulled the country fully out of the Great Depression.