If your budget isn't balanced you need to borrow. When you borrow, you have to pay interest.

Paying more and more interest leaves less and less money for services for your citizens. To compensate you must raise taxes and print money.

Printing money inflates the savings away from middle class citizens, and wages lag inflation causing a double whammy. This generates increased inequality, which then puts more pressure on government.

So yes, balanced budgets do matter.

> if your budget isn't balanced you need to borrow.

No.

That is how it works for citizens and households.

That is not how it works for governments and central banks. Their role and their financial apparatus is completely different.

Thinking that it works the same way is a well-known fallacy. The government more closely resembles the _counterparty_ in civilian borrowing.

https://en.wikipedia.org/wiki/Government-Household_analogy

https://www.taxresearch.org.uk/Blog/2019/11/11/the-uk-govern...

https://theconversation.com/why-the-federal-budget-is-not-li...

>That is how it works for citizens and households.

>That is not how it works for governments and central banks.

At no point did I mention households.

Governments absolutely do borrow money - https://www.investopedia.com/terms/t/treasurybill.asp

If they weren't borrowing money, then what do you call the interest they have to pay? Which by the was $1 trillion last year - https://www.crfb.org/blogs/debt-rises-interest-costs-could-t...

Imagine what we could do with that trillion dollars...instead we have to print more money and deflate the savings of our middle class citizens to cover the cost.

Thank you. Those links are gems. It's probably worth also noting that the government does borrow a lot (even when it doesn't have to), but often from itself, and also often from the private sector but on terms that are completely different from those available to anyone else. Also that government borrowing generally doesn't cause (or even coincide with) inflation (although I think maybe sometimes it does - this is where I'm not clear on the details).

Those links simply back up that I was correct in saying that our government borrows money, and as a result we have to cover an ever increasing amount of interest payments which was around $1 trillion dollars last year - https://www.crfb.org/blogs/debt-rises-interest-costs-could-t...

So where does that trillion dollars come from? We inflate it away from citizens by printing more money. And that trillion dollars is wasted on interest, it isn't used on any services for the citizens.

So yes, balanced budgets matter.