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Topic: Miscellaneous
Number of pages / Number of words: 3 / 808
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"The Reagan administration discredited this notion, cutting taxes to such a degree that the United States would face perpetually high deficits, regardless of how hot the economy was," according to economist John Maynard Keynes.

The answer does not appear to be a balanced-budget amendment, unless you want to prevent the federal government from fighting recessions...


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This would just make things worse, because then the federal government would be forced to make recessions worse. When the economy slows down, income and Social Security tax revenues drop, due to falling wages and profits. Meanwhile, costs for some programs, such as unemployment compensation, rise.

These changes automatically put the federal budget into deficit, even if a balanced budget had been planned at the beginning of the fiscal year...


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