3 ms·

That also assumes that a "balanced budget" is the best macro-economic policy for a country of our size.

• palmfacehn 1y ago
  Another consideration would be the "Economic Calculation Problem", or our inability measure (price) the utility of state allocations of capital. The deficit is only one implication of the spending program. There are also the unseen factors when these funds are removed from the private sector, not just via taxation but also by comparative valuation of scarce resources. I.e. if there are 100 cement trucks in the economy and 95 are allocated for state projects, the private sector needs to produce additional cement trucks under the increased burden of taxation. In the near term, cement construction costs have been increased. From this point, perhaps another bureau will enter by nationalizing the cement truck industry, "To secure our vital national interests and remain competitive" Without decentralized market price signals, we are unable to value the end goals of the state's construction project. More troubling still, we wouldn't know of how the market may have allocated those trucks or if those trucks would have been used in a more productive way. However, we can observe empirical historical examples of lowered productivity which correlates with central planning.