Do We Really Need a Balanced Budget?

There is currently a great deal of debate about whether or not we need a balanced budget amendment, although all sides seem to agree that in any case, we do need a balancd budget. But is this necessarily the case?

There is some evidence that the furor over balancing the budget is simply a political maneuver aimed at eliminating welfare. In the May/June 1996 issue of Tikkun, Frank Reisman ("The Balanced Budget Myth") writes that calls to balance the budget is nothing less than an attempt to abolish the so-called "welfare state."

In periods when the national debt was decreased, the US experienced great economic depression ( 1819, 1837, 1873, 1893, and the great depression of 1929.) Furthermore, borrowing, even on a massive scale, may be productive and often necessary.

If the budet deficits of the 1980's had gone to finance research, human resources development, environmental protection, and rebuilding of the infrastructure, the result would have been an increase in prouctivity. Secondy, deficit spending is often necessary to maintain aggragate demand.