> But it's a false dichotomy that these are the only choices.
I agree. Unfortunately, these are the only choices that are typically envisioned by people advocating balanced budgets, so they are automatically associated to the concept. It's the responsibility of such advocates to come up with alternative choices; alas, as we've just seen, they don't seem willing to entertain the possible existence of alternative paths.
> The problem with most macroeconomic theories is that they ignore too many important details. So for example [...] you can come to completely different conclusions as to the effectiveness of government spending.
Among the many important details these theories ignore is the actual identity of people responsible for such spending.
A politicians' goal is to get reelected. If not, their party will quickly replace them with someone who has that goal.
Budget cuts, when they are made, are done in the places where they will minimise the political damage to the party making the cuts.
It's not that nobody can come up with saving money in the bureaucracy, military&secret services, government subsidies, etc. It's just that they are costly in terms of political power and therefore not discussed at all. And the easiest things to slash are things your own voters don't care about and the easiest taxes to increase those that your voters don't pay.
I doubt that any kind of economic thinking goes into these decisions.
I agree. Unfortunately, these are the only choices that are typically envisioned by people advocating balanced budgets, so they are automatically associated to the concept. It's the responsibility of such advocates to come up with alternative choices; alas, as we've just seen, they don't seem willing to entertain the possible existence of alternative paths.
> The problem with most macroeconomic theories is that they ignore too many important details. So for example [...] you can come to completely different conclusions as to the effectiveness of government spending.
Among the many important details these theories ignore is the actual identity of people responsible for such spending.
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