Balanced budget religion

8 January, 2018 at 08:55 | Posted in Economics | 6 Comments

PAUL_SAMUELSONI think there is an element of truth in the view that the superstition that the budget must be balanced at all times [is necessary]. Once it is debunked, [it] takes away one of the bulwarks that every society must have against expenditure out of control. There must be discipline in the allocation of resources or you will have anarchistic chaos and inefficiency. And one of the functions of old fashioned religion was to scare people by sometimes what might be regarded as myths into behaving in a way that the long-run civilized life requires. We have taken away a belief in the intrinsic necessity of balancing the budget if not in every year, [and then] in every short period of time. If Prime Minister Gladstone came back to life he would say “oh, oh what you have done” and James Buchanan argues in those terms. I have to say that I see merit in that view.

Paul Samuelson

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  1. The balanced budget argument is used to justify Austerity and Neoliberal policies. They, in turn, lead to the articles in the book The Violence of Austerity.

  2. “There must be discipline in the allocation of resources or you will have anarchistic chaos and inefficiency.”

    I see budget discipline resulting in gross inefficiency and a system spinning out of control. I recently learned about a guy in Oregon who cleans up trash. The county doesn’t like it because they have to pay recycling and waste disposal fees, and their budget is limited. Thus capitalist incentives promote leaving trash where it is and harvesting new rubber and fresh logging. Privatizing landfills leads to government trying to discourage volunteer trash collectors. Such a system makes no sense to me. Why doesn’t Samuelson know how nonsensical his economic system appears to me?

  3. Austerity involves austerity cuts as we are seeing from the recent Republican tax cut. Austerity also involves the fiction of the balanced budget which is only balanced on a yearly basis and pushes large debts down the road. Worst of all is the moral austerity of censorship and sexual Puritanism.

  4. Positive yields on the inherently risk-free debt of monetary sovereigns, besides being welfare proportional to account balance,i.e. welfare for the rich, imply the desirability of balanced budgets.

    True reform would include eliminating that welfare for the rich.


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