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Tuesday, February 17, 2004
James Joyner on the deficit:
Back in the days when conservative Republicans were balanced budget hawks, Ronald Reagan would say that government, like a family, must live within its means and balance its budget. It sounded reasonable to me then. But I was 14 years old. All that's asked of families is that they pay the bills when they come in. It's not smart to buy perishable luxuries on credit (it would be inadvisable to take the family on vacation using a high interest credit card) but families routinely go into debt to buy a house, a car, and other big ticket items that they need. If an emergency comes up (mom needs an operation, the pipes burst, the transmission dies) then most families just go into debt and figure out how to make ends meet after the crisis is over.
By the same token, government quite reasonably takes on debt to pay for long-term investments in infrastructure, security, and to even out the effects of the business cycle. Ronald Reagan spent us into then-record deficits (which none of us thought we?d see paid off in our lifetimes) in order to defeat the Soviets. In hindsight, it's possible that we spend more than we needed to. But the fact remains that the mission got accomplished and the benefits are accruing to generations to come; it's not unreasonable that they are asked to pay some of the costs.
Modern wartime economies have functioned with deficits. Similarly, when households have to deal with crises, they borrow. Debt is not a bad thing, despite all the naysayers. Extravagant debt is a bad thing.Labels: Archives_2004
.: posted by
Dave
8:11 PM
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