Deficits As Sin

The Globe and Mail has an editorial today, decrying deficit spending. It reads like a sermon on the evils of drink from the early 20th century. The parsons who control the editorial boards in this country had better get one thing straight, we are in a world of trouble and the last thing governments need to do is stop spending. If the Great Depression taught us anything, it was that during times of economic contraction, the worst course of action is to exacerbate the contraction through government spending cuts. It may make the editorial boards of our papers feel good by making balanced budgets somehow more virtuous, but it bears no relation to the realities we are facing. If we are to get through these next few years with as little pain as we can manage, everyone -- governments, opposition parties, the public, and the press -- is going to have to realize issue of balanced budgets is not one of virtue versus sin. It is simply a rational decision to minimize the damage caused by a lack of private sector spending. Browbeating governments into making the situation worse may make us feel better in the very short term, but it is a position that will come back to bite us, and sooner than we think.

Recommend this Post