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Which means the private sector is in net debt. Is that somehow more virtuous than public debt?

Von überall könnte das Volk, Urbrut alles Undemokratischen, Zelle des Terrors, über die gewählten Hüter von Wachstum und Wohlstand® kommen. - flatter
by generic on Sun Aug 14th, 2011 at 12:24:49 PM EST
[ Parent ]
No. Do you think the public sector should never be balanced or in surplus?
by IM on Sun Aug 14th, 2011 at 01:18:41 PM EST
[ Parent ]
Long-run? Only if your economy is on a stagnant or negative nominal growth path. In a nominally growing economy, the sovereign should run moderate cycle-averaged deficits to accommodate the private sector's need for sovereign securities.

Short-run? Obviously, during a bubble you should tax until the bubble stops. Which means that you may be running a surplus for a while. But if you have bubbles on a regular basis then You're Doing It Wrong.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Aug 14th, 2011 at 01:51:53 PM EST
[ Parent ]

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