Basic Keynesian analysis suggests that a deficit budget during a slowdown is a good thing.
In the present slowdown in the economy due to external shocks, private sector spending is observed to be falling, and individual saving is on the rise – leading to unused resources.
Government borrowing is a way of utilizing these unused savings and ‘#kickstarting’ the economy.
The #deficit spending, especially on #regional infrastructure, can help promote higher growth, which will enable higher tax revenues and the deficit will fall over time.
If you try to balance the budget in a slowdown, it will worsen the situation.
But, one need to understand that Projects aimed at Population Concentration result in (unfair) #Redistribution and hence will not help create any extra value.
Therefore, it is not the Deficit Budget but #Priorities that #Matter.
