Balanced National Budget Essay

616 words - 3 pages

When national revenues total equals to or exceed total expense in a fiscal year denotes a balanced budget. Emphasis needs mentioning that a balanced budget refers to either a situation where there is neither a budget deficit nor a budget surplus. Put simply, revenues equal expenses or exceed costs, but not where expenses exceed revenues.
Proponents of a balanced national budget uphold it will condense interest rates, increase savings and investments and further economic growth with favorable balance of trade deficits. Rather, Keynesian arguments against a balanced national budget appeal to the reasoning given that public sector operations usually have multiple and conflicting objectives ...view middle of the document...

Given an uncertain future, governments do not have control over its expenditures on the possibility of war, terrorism, economic depression, or other crises.
A balanced budget might occasion tax increases, thwart innovation, constrain national governments capacity to respond to citizens clients, and increase the unit cost of services. On the premise of uncertainty, maximum flexibility is needed if governments are to deliver efficiently on their mandates.
Economist argues that a balanced budget will decrease interest rates, increase savings and investment, shrink trade deficits and usher economic prosperity. The requirement of an economy void of deficits might occasion a smaller government and controlled wastes. A balanced budget could set a standard that elected officials would not want to miss, there are also legitimate concerns about how it would operate in practice.
A balanced budget designed almost exclusively to provide fiscal constraint provides the narrowest of controls....

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