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The US federal government has run deficits for the majority of recent history.
T
The US federal government has run deficits for the majority of recent history.
There have been proposals in the past for requiring government’s to balance their
budget, such as proposals for a balanced budget amendment or similar policy rules.
What are the benefits of a balanced government budget? What are the potential
problems? How do different schools of macroeconomic thought view this
situation? You could also look at state-level analysis, as most US states do have
some sort of balanced budget rule. A similar topic is the European Union’s Stability
and Growth Pact (SGP) for eurozone nations, which requires them to maintain a
budget deficit of less than 3% of GDP, except during times of economic turmoil
(which has been ignored by some members and also be aware the SGP has been
changed over time; the current version is different than the original). You could
explain the purpose and goals of this act, the benefits and costs of fulfilling these
requirements, and the problems that have occurred in under the SGP.
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