In a recent opinion piece for Barron’s, Paul Sheard (former Vice Chairman of S&P Global) purported to list myths about budget deficits that “deserve straightening out.” Sheard only succeeded insofar as he created his own.
He contends that government doesn’t need to borrow “in order to spend and run deficits.” Actually, government has no resources other than its ability tax or borrow the fruits of actual production. Absent its taxing power, there would be no deficits. Deficits don’t boost growth as economists imagine, rather they’re a consequence of producers having lighter pockets born of government’s long fingers.
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