Goldberg: Deficits Are Non-Issue

Goldberg: Deficits Are Non-Issue

I've been saying this for years but no one wants to hear it. It's an economic reality. folks.

It would be great to have zero deficit and debt, BUT, if people are still willing to lend you money when you need it, then it doesn't really matter.

Don't get me wrong - I WANT Congrefs to reduce spending and thereby reduce the deficit. But that desire is motivated primarily by a desire to see the gov't shrink and to see it take less and less of our money. Not by a fear that the deficit will kill the country.

Plus, when you look at it as percent of GDP (the only way that it makes sense), this deficit is MINUSCULE - 2.8%.

Imagine that you make $4000 per month . If you ran a 2.8% deficit, that would be a WHOPPING $112.

Now, it would be better to run a surplus, no doubt. But if it were GUARANTEED that someone would continue to lend you money any time you needed it, it would not really be a big deal.

What about interest payments? you say.

There are two answers to that.

1. If your income continues to go up, and interest rates stay low, then you can easily mange them.
2. If you are running this deficit to pay for health care, for example, rather than extra pizzas per month, then you don't really mind the trade off, do you?

This deficit is brought to you primarily as a result of over spending by Congress and the President. Anybody remember the Medicare Prescription Benefit? Or the War on Terror and in Iraq?

In the end, the deficit will not matter to those who think through it. To unthinking, easily scare-able folks, it will be huge.

Deficits don't matter

I don't want a huge federal government because I don't want a huge federal government, not because we're borrowing too much money. Whether or not Sweden has a balanced budget has precisely zero impact on my lack of desire to live there.

There's a long list of reasons why big government is wrong: a big government is inefficient; it saps individual initiative; it imposes Washington's values on a vast nation of free people; it makes us all employees of the state and so on.

I agree that a big deficit belongs on that list, but not anywhere near the top of it.