As US public finances crumble, private sector thrives: McGeever
SPY•Why deficits are not the same as household budgets
Simple macro accounting suggests this is probably as it should be — a huge government deficit must be matched by a combined surplus from the private and foreign sectors.
It's worth noting that government deficits are essentially a political choice, a conscious decision to shift resources from the public to the private sector. President Donald Trump’s "One Big Beautiful Bill" last year certainly reflects that, with the non-partisan Congressional Budget Office estimating that it will add $4.7 trillion to deficits through 2035.
Of course, there is nothing inherently wrong with government deficits. In fact, many developed economies may need to run small deficits to keep growth chugging along. In the last half century, the U.S. government has posted a budget surplus in only four years: 1998-2001.
It's an obvious point, but it still bears repeating: government finances are not like household or company budgets. Washington has near-limitless borrowing capacity, can print as many dollars as it wants, and controls the world's reserve currency. Dollar debasement is a potential risk over the long term, but the doomsayers predicting the collapse of the currency and hyperinflation for 50 years have yet to be proved right.
