When it comes to the struggles of the U.S. economy, everybody knows how to place blame.
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Almost everybody is against federal budget deficits, but almost no one knows what he or she is talking about, wrote Robert Eisner in “Sense and Nonsense About Budget Deficits” (May–June 1993). Deficits can be good for us as well as bad, too small as well as too large. And in order to determine which kind of deficit you’re dealing with, you have to know how to measure it correctly. For most of the last 50 years, Eisner argued, deficits have been too small. Deficits can generate purchasing power. They can add to total productivity. And historically, they have been associated with greater national saving.
A version of this article appeared in the July–August 1993 issue of Harvard Business Review.
Read more on Costing or related topics Government policy and regulation, Economics, Government and Labor
WS William A. Schreyer is Chairman of the Board Emeritus, Merrill Lynch & Co., Inc., New York, New York.
ER Edwin S. Rubenstein is Economic Analyst for the National Review New York, New York.
TD Tapan Datta is Senior Economist, Global Economics Unit, American Express Bank, London, England.
RD Rudi Dornbusch is Ford International Professor of Economics, Massachusetts Institute of Technology, Cambridge, Massachusetts.
AM Allan H. Meltzer is University Professor of Political Economy, Carnegie-Mellon University, Pittsburgh, Pennsylvania; and Visiting Scholar, American Enterprise Institute for Public Policy Research, Washington, D.C.
WR William Reinfeld is President, William Reinfeld & Associates, Taipei, Taiwan.
HR Harvey S. Rosen is Professor of Economics, Princeton University, Princeton, New Jersey.
PR Paul Craig Roberts holds the William E. Simon Chair in Political Economy, Center for Strategic and International Studies, Washington, D.C.
Read more on Costing or related topics Government policy and regulation, Economics, Government and Labor
