There's really no reason to balance the budget in 2002, or really in any particular year. Government borrowing for roads, airports and education can improve the economy, he said, and a growing economy can afford some government borrowing. Our deficits are now running about two percent of gross domestic product. That, he said, is less than that of any advanced country in the world except possibly Japan. Investment redirected However, most economists believe government deficits soak up money that might have financed new factories because savers invest more in government securities and less in stocks, corporate bonds, and mortgage funds.
Home mortgages become more expensive as government borrowing bids up interest rates.
That means higher rates for student loans and car loans or leases. End government borrowing and the country's savings gets invested in the private sector, most economists contend. It should be modestly everywhere. So balancing the federal budget, while proving a giant leap for Washington's politicians, would probably be a modest, though positive step for future jobs and income. External sites are not endorsed by CNN Interactive.