When Deficits Make Sense: How Debt Helps to Discipline Public Spending
Publication Date: January 2008
Publisher(s): Hoover Institution on War, Revolution, and Peace
Author(s): Dino Falaschetti
Series: Hoover Digest
Keywords: Deficit; Economy
Coverage: United States
Financial markets put a brake on ill-considered government projects, even when taxpayers don’t. This article uses examples of to illustrate the author's point that running deficits, not balancing budgets, can productively constrain governments by raising the price on unproductive spending while readily supporting public projects that strengthen economic performance.