The Economy: Now It's the Surplus Problem

The federal budget has lately been a source of concern in Washington, but for an odd reason: there are unmistakable signs that the deficit is declining. This should be a cause for celebration, and for the most part it is, because it demonstrates that business has been vigorous enough to generate additional revenue for the Government despite the tax cut—and partly because of it. But the deficit decline disturbs many "activist" economists, who advance the neo-Keynesian argument that if business is to grow vigorously, the Government must pump more money into the economy than it takes out.

Balancing Act. After estimating...

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