Balanced budget

financial plan where revenues equal expenses

A balanced budget is a budget in which the amount of money spent is the same as the amount of money received. In general, it's a budget that has no budget deficit (spending more money than one has), but it could have a budget surplus[1] (spending less money than one has).

Balanced budgets and budget deficits are a controversial issue among economists and politicians. Some economists think that a balanced budget can lower interest rates,[2] increase investment,[2] shrink trade deficits,[2] and help the economy grow.[2] Other economists think that among countries that can print their own money balanced budgets aren't as important. These economists also say that government spending can boost productivity, innovation, and savings in the private sector.[3] Many economists who think this are supporters of Modern Monetary Theory (MMT).

ReferencesEdit

  1. O'Sullivan, Arthur; Sheffrin, Steven M. (2003). Economics: Principles in Action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. pp. 376, 403. ISBN 0-13-063085-3.
  2. 2.0 2.1 2.2 2.3 "Winners and Losers in a Balanced Budget". The Washington Post. 4 May 1997
  3. Matthews, Dylan (2019-04-16). "A very detailed walkthrough of Modern Monetary Theory, the big new left economic idea". Vox Retrieved 2022-01-04.