2 ms·

There is definitely a difference between state budgets and federal budgets: fiat currency.

• rhino369 9y ago
  Fiat currency gives you some leeway, but if you start trying to monetize your budget, you are risking run away inflation.
• dragonwriter 9y ago
  Perhaps more immediately significant is virtually all states have constitutional requirements for short-term balance of operating budgets, and often strict constitutionsl rules on approval and use of debt financing, while the federal government has neither. Fist currency in principal allows monetizing budgets (either in general or debt specifically), but this is avoided in practice (and one reason for independent central banks is to provide confidence that political actors will not engage in monetization.)