Abstract:
The budget deficit is often paraded by economists, politicians and so-called financial market experts to set out a case against an active fiscal policy. Its appeal lies in its seeming simplicity. We are given the easy-tounderstand homily of the family budget and told that if the family or the government lives beyond its means then trouble looms. The fact is that the budget outcome is far from unambiguous. In this regard it is one of the most misunderstood and misused concepts that creep out of economics into the public domain. The current debate about the state of the Federal Budget is a good example of how misleading ‘rationalist’ rhetoric can distort the policy process and impair the operation of the economy.
Details / PDF:
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