Talk:Government budget balance

message: I think it is a result of the merge of articles on Balance and Deficit. The article is about budget balance, but it starts off talking about deficits and debt, and only after that talks about primary balance and sectoral balances. THEN there is an overview. Followed by more on deficits.
Unless anyone objects I propose to rearrange the sections, start with Overview, then Balances in general, then deficits. Maybe insert something on Surpluses before that. Prosopon (talk) 02:01, 27 September 2016 (UTC)
thread_title: The sections of this article are completely out of sequence.

message: In the real world inflation, an increase in the general level of prices, goes hand in hand with high utilization and low unemployment and dozens of other combinations of causes.  So governments, or their central banks which can typically move much faster, must lean against the wind to prevent overly cyclical booms and busts.  One part, among many, of this "taming of the business cycle" is what is now called quantitative easing and used to be called open market operations. Quantitative easing eighty years ago in the time of Hayek and Keynes meant open market purchases that flowed newly created money into the commercial banks to become loanable funds to encourage the expansion of jobs and production in the real economy;  today quantitative easing as practiced by the Federal Reserve primarily flows money abroad and into the financial markets such that little, if any, ever reaches the real economy and that which does may not impact the real economy due to higher reserve requirements and loan requirements being imposed by the Federal Reserve and other regulators.
I agree, this article needs to be updated to include a discussion of deficits and surpluses in a sovereign fiat currency issuing nation such as the USA, Canada, Australia, etc.  — Preceding unsigned comment added by 204.76.196.12 (talk) 17:41, 12 September 2013 (UTC)
thread_title: This Entire First paragraph takes a common knowledge point of view in that it primarily repeats inaccurate common knowledge about the impact and role of fiscal policies and deficits.

message: Onesimplehuman 17:41, 30 April 2006 (UTC)
thread_title:  This definition is incomplete... 

message: What in the world does that mean? I came across it in the third paragraph of this article. It sounds totally incoherent. Maybe it's just me, but I can't figure it out. 190.41.20.44 23:06, 14 November 2007 (UTC)
thread_title:  "The human by-products were unfathomable." 

message: "Increased levels of economic activity generally lead to higher tax revenues". It seems like that ought to have "ceteris paribus" after it. After all, as studies of the Laffer curve have shown, increased ecnomic activity,if caused by lowering of taxes, will not increase revenue.74.219.149.67 (talk) 18:44, 4 October 2008 (UTC)
replies: text: I think the term "generally" allows for this exception. Even in the area of taxation it depends on the type of tax and where you are on the curve.  Morphh  (talk) 21:46, 04 October 2008 (UTC)

text: Clearly it does because a tax cut can be a form of spending. It is the decision not to destroy (by taxation) money spent into the economy. Taxes aren't 'revenue' in the sense of 'funding' they are a fiscal space mechanism. 86.87.191.180 (talk) 17:14, 21 October 2022 (UTC)
thread_title:  Can someone clarify this? 

message: "Monetizing debts, however, can cause rapid inflation (but does not necessarily do so)" surely if it "does not necessrily do so" then it cannot be said to "cause" rapid inflation. I think the sentence needs a bit of editing, and maybe a bit more thought.  —Preceding unsigned comment added by 81.187.233.172 (talk) 13:57, 16 March 2010 (UTC)
replies: text: We are now embarked on QE2.  And if the FED follows through with it's plan to buy $600B in debt over the next 6 months we will have the answer to this question.  I am betting that the inflation monster stays hidden in the underwear of the trickle down toadies.The Trucker (talk) 05:49, 26 November 2010 (UTC)
replies: text:  Typo spotted in above comment: possessive pronoun shouldn't have apostrophe. s/it's/its/ 198.144.192.45 (talk) 06:47, 4 January 2011 (UTC)
thread_title:  Does monetizing debts cause rapid inflation or doesn't it? 

message: The first section "Primary deficit, total deficit, and debt" needs to clarify right up front that "deficit" is a rate of money per unit time, not an absolute amount of money. For example, it makes no sense to say (as Gwen Ifill did on tonight's PBS NewsHour) taht Michigan's deficit is $2 billion, because that makes no sense, it's the wrong units. Michigan's deficit would be $2 billion *per*year*, or Michigan's *yearly* deficit would be $2 billion.
This is analagous to the distinction between distance and speed. For example, the speed of light isn't one foot, or 186000 miles, it's (appx.) one foot per nanosecond, or (appx.) 186000 miles per second. Or a light-nanosecond is (appx.) one foot.
Note that GNP (Gross National Product), GDP (Gross Domestic Product), are likewise money per unit time. Thus deficit can be expressed as a percentage of GNP or GDP since they are in the same units.
198.144.192.45 (talk) 06:35, 4 January 2011 (UTC)
replies: text: I don't see any issue here; normally deficit is given for the accounting period, usually one year, often calendar year. If something else is meant (first half, third quarter, whatever) of course it needs to be specified. --Sivullinen (talk) 21:13, 8 October 2011 (UTC)

text: I think Robert has a point here. Of course, it is commonly understood that the deficit is meant being incurred over the period of one year (if not stated otherwise). Hence, I would not criticize PBS for not spelling this out. However, here we at an encyclopedia. Our task is to clarify terms, and it help a great deal to mention that the deficit is a flow amount and no stock, as Benuel puts it. I will see if I can fit this in the article somewhere. Tomeasy T C 23:32, 20 July 2012 (UTC)
thread_title:  Article needs clarification that deficit is rate of money per time 

message: In the chapter "Primary deficit, total deficit, and debt" there are simple equations that connect deficit and debt. It seems they are too simple. If you look e.g. at Eurostat document "Provision of deficit and debt data for 2010 - first notification" http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/2-26042011-AP/EN/2-26042011-AP-EN.PDF it is easy to see that the simple equation doesn't hold. Something missing? I cannot explain. Sivullinen (talk) 14:17, 7 October 2011 (UTC)
replies: text: Can you be more specific: Where in the document do you find evidence that our equations are incorrect? Tomeasy T C 23:23, 20 July 2012 (UTC)
replies: text: Simple enough, the change in debt does not equal to the deficit, for almost any country, as the equations of the article claim. But I think I have the answer to my question: the debt shown in the statistics is the gross debt; deficit is the net lending/borrowing. This is stated already in the introduction chapter of ESA95 "Manual on Government Deficit and Debt"  and is shown in more detail e.g. in Table 3A: "Provision of the data which explain the contributions of the deficit/surplus and the other relevant factors to the variation in the debt level (general government)" of Annex 2. Completed tables for the EU countries are available e.g. in the document "Government finance statistics, Summary tables - 2/2011" . --Sivullinen (talk) 19:27, 23 July 2012 (UTC)
replies: text: And then there is the interest paid on the debt, which adds to the primary deficit. Tomeasy T C 20:26, 23 July 2012 (UTC)
replies: text: For a short and overall explanation of how debt levels and changes in debt levels are calculated, I can recommend to read page 7 about "Net borrowing" and page 10-12 about "Debt and debt levels", written as methodoligy notes at the Economic Spring Forecast appendix (Part 1: tables) published by the European Comission. As you already mentioned, Government debt will not only change by the amount of yearly "budget deficit", but also according to the "stock-flow adjustment" (primarily comprising of the governments buy/sell of financial assets/liquidity). While changes to the debt-to-GDP ratio are also affected by the nominal GDP growth, as this figure will help to diminish the denominator of the equation. Danish Expert (talk) 11:12, 7 August 2012 (UTC)
thread_title:  Primary deficit, total deficit, and debt 

message: As part of turning the Government budget balance article into an overall article, covering all sorts of concepts and terms related to the Government budget balance, I today filed a proposal also to completely merge the current sub-articles in this field into the main article. The sub-articles are IMHO so closely related to the main article, that they can easily be integrated into the main article. In fact they are already partly covered. And currently the sub-articles only have a "stub size", which in my opinion doesnt justify they should be covered by seperate spinoff articles. Please let me know if you agree/disagree? The 4 subarticles I propose to merge into the "Government budget balance" main article are:
* Primary deficit
* Structural and cyclical deficit
* Primary balance (statistical term)
* Deficit spending
Danish Expert (talk) 13:09, 4 August 2012 (UTC)
replies: text: I would not mind for the first 3, but deficit spending seems to be a term much wider in scope than government budgets. This one should probably not be merged. Tomeasy T C 19:38, 6 August 2012 (UTC)
replies: text: I agree with Tomeasy about Deficit spending, and also that Structural and cyclical deficit not be merged. That article needs to be enlarged; "structural balance" used to be called "full employment balance" (iirc that term & the concept due originally to Beardsley Ruml in order to convince FDR to intentionally deficit-spend in 1937-38)  and this (IMHO detrimental) terminological change sowed confusion, whose exploration & clarification would be excessive for this more general article.John Z (talk) 01:36, 22 October 2012 (UTC)

text: Yeah, merge Primary deficit and Primary balance (statistical term) only. Deficit spending is a fully developed article and is in very good shape compared to Government budget balance, which still needs a lot of work. It might make sense to roll Structural and cyclical deficit into Deficit spending so editors don't duplicate work going forward.  Sparkie82 (t•c)  01:43, 5 December 2012 (UTC)
replies: text: That sounds like a good plan to me. Morphh  (talk) 02:02, 5 December 2012 (UTC)
thread_title:  Suggestion to merge 4 sub-articles into the main article 

message: If you have a surplus then you can lend it out and make interest. Lending businesses do not want government to have a surplus so that government can not compete with them. In addition if government has a surplus it will have no need to borrow money from them. Even though a government surplus would allow individuals and corporations to pay lower taxes many business based political groups would rather have the income from deficit spending by lending government money on which they can collect interest while complaining about high taxes. The ideal position for government and citizens however is a government surplus these groups want to deny. --Budgetstudiesforum (talk) 10:00, 24 November 2012 (UTC)
replies: text: Everything in that passage is fundamentally wrong except for the title up to 'business'. A government surplus means the government isn't spending anything it is the equal and direct opposite of fiscal injections (deficits). Clearly a government surplus is bad for everyone who isn't the government because it means they must run down their own surplus, which they run out of, not being currency issuers. There is no 'competing with business' by having the fiscal balance tipped toward a fiscal surplus. This is not money that gets spent it is money not spent. The government doesn't borrow money from business, it supplies money to them. It is the only legal entity in a sovereign monetary economy which can ever supply them with it. Remember when the banks and stock market crashed in 2008? Government refinanced them, and clearly didn't borrow it from that same bankrupt business sector. If the private sector is government's financier this couldn't have happened. The ideal position for government and citizens is one where the private domestic sector is never in deficit, which means the government should be under most circumstances (or that there is a foreign sector surplus, which is non-existent for places like the U.S. and UK). When governments of this type try to run surpluses, the public quickly falls into penury. 86.87.191.180 (talk) 17:46, 21 October 2022 (UTC)
thread_title: Reason why government surplus is not prefered by business although good for government and citizens

message: Ricardian equivalence is based on a UK member of parliment. Which is very UK based. It's economic merits are questionable. It's fiscal policy merits are small an only specific to speculation of UK fiscal policy. If anything on a minor basis.  — Preceding unsigned comment added by 137.111.13.200 (talk) 04:08, 8 June 2014 (UTC)
thread_title:  Ricardian equivalence questionable theory 

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