Plain Sense Economics

Cornell’s Robert Frank wrote today in The New York Times,

[...]there are really only three basic truths that policy makers need to know about deficits: First, it’s actually good to run them during deep economic downturns. Second, whether deficits are bad in the long run depends on how borrowed money is spent. And third, eliminating deficits entirely would not require any painful sacrifices.

This is worth a read. He may over state the case for continued, thoughtful additions to our national debt, but his piece is a good reminder that fiscal policy is not really like balancing your family’s budget.