Published by:
Harvard Business Publishing
Length: 13 pages
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Abstract
Almost everbody is against federal budget deficits. And almost no one knows what he or she is talking about. The author contends that deficits can be good for us as well as bad, too small as well as too large. The key is knowing how to measure them correctly. The United States has many ways of measuring the federal deficit, most of which would trouble accountants. Still, comprehensive investment in research and development, education, and training could reduce the deficit by about $80 billion. Bringing unemployment back to 5.3% by 1996 would itself cut $130 billion from the deficit. Deficits can generate purchasing power for the products of U.S. business and add to total productivity, and they have been historically associated with greater national saving. For most of the last 50 years, deficits have been too small. Far from struggling to reduce the deficit, we should be looking for the most productive ways to increase it. "HBR Reprint #93401 (Is the Deficit a Friendly Giant After All?) provides commentary from eight experts."
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Abstract
Almost everbody is against federal budget deficits. And almost no one knows what he or she is talking about. The author contends that deficits can be good for us as well as bad, too small as well as too large. The key is knowing how to measure them correctly. The United States has many ways of measuring the federal deficit, most of which would trouble accountants. Still, comprehensive investment in research and development, education, and training could reduce the deficit by about $80 billion. Bringing unemployment back to 5.3% by 1996 would itself cut $130 billion from the deficit. Deficits can generate purchasing power for the products of U.S. business and add to total productivity, and they have been historically associated with greater national saving. For most of the last 50 years, deficits have been too small. Far from struggling to reduce the deficit, we should be looking for the most productive ways to increase it. "HBR Reprint #93401 (Is the Deficit a Friendly Giant After All?) provides commentary from eight experts."