I think it is quite possible that a growing economy needs either a private or public deficit.
So either find a way to run an economy entirely without debt or have continuous deficits.
Productivity growth is a deflationary pressure. To counteract that pressure you need an expansive monetary policy. Otherwise, servicing debt becomes increasingly difficult, a crisis ensues and growth is halted.
Is this conventional wisdom? i.e. recognised by serious economists?
It certainly fills in a blank in my naive understanding of things economic. It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
See also this thread. By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.