The governor, with a new administration and a somewhat different philosophy of governing than his predecessor, now has an opportunity to rethink the state's approach to budget policy. The changes he must make can promote prosperity and job creation and place North Carolina on track for strong economic growth in the future. All Balanced Budgets are Not Equal A budget deficit simply implies that during the fiscal year revenues to the state's general fund are less than spending. As noted, in North Carolina, the state is required to balance its budget each year. This requirement is sensible.
Deficit spending is a hidden tax that masks the true burden of government.
It deceives taxpayers, leading them to believe that government services cost less than they actually do. If the state is to have an informed electorate, the taxes that they pay should reflect the actual size and scope of their government. This noted, the way that the budget is kept in balance makes a big difference to the long term health of the state economy From the perspective of economics and, just as importantly, individual liberty reducing spending is unambiguously preferred to raising taxes. This is because taxation transfers control of revenues, and therefore resources, from consumers, businesses, and entrepreneurs in the private sector to legislators and bureaucrats in the public sector. Lowering government spending, on the other hand, moves resources from public to private sector control.