There's no problem with running a public debt as long as that debt is serviced - it doesn't have to be paid back. Some tax goes to buy hospitals, some goes to buy credit to buy more hospitals.

Borrowing to spend during a recession is not a bad idea at all.

Again, the question of the right balance remains moot.

But let's allow for the nonce that public borrowing ought to be minimal, or zero if possible. That means sacrificing a lot of what people want. Moreover, we are where we are - so making policy based on a hypothetical realm would be of little help.

Note that, as far as I know, no Western economy has no public debt (with the possible exception of Norway, which has oil money).
( Enzyme is powered by sunlight, Tue 17 Mar 2009, 11:33, Reply)