Comments on: Reader Questions http://www.davejustus.com/2008/04/24/reader-questions/ None Sine Causa Fri, 08 Aug 2008 20:40:16 +0000 http://wordpress.org/?v=2.5 By: Greg http://www.davejustus.com/2008/04/24/reader-questions/#comment-565530 Greg Wed, 30 Apr 2008 04:58:54 +0000 http://www.davejustus.com/?p=3151#comment-565530 Deficit spending that represents a positive investment can be good. But because the inefficiency of government, it is doubtful that this deficit spending will be as efficient as letting individuals and state governments do that spending. My suggestion: Target the next year's budget based on the current year's actual results, as appropriate to an expectation of growth equal to the expected population growth, minus 2%. Assume the economy is in a mild recession, and you'll rarely overspend your next year's tax revenue. And if the economy is good, you'll collect a lot more tax revenue than you spend, and can spend somewhat more next year. Do this until the debt is largely reduced. Deficit spending that represents a positive investment can be good. But because the inefficiency of government, it is doubtful that this deficit spending will be as efficient as letting individuals and state governments do that spending.

My suggestion: Target the next year’s budget based on the current year’s actual results, as appropriate to an expectation of growth equal to the expected population growth, minus 2%. Assume the economy is in a mild recession, and you’ll rarely overspend your next year’s tax revenue. And if the economy is good, you’ll collect a lot more tax revenue than you spend, and can spend somewhat more next year.

Do this until the debt is largely reduced.

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