INSECURITY, IMMORALITY, AND FEDERAL BUDGET DEFICITS Available to Purchase

Introduction It is the purpose of this paper to examine the issue of federal deficits from a general, and thus, a broader perspective than is traditionally employed. It is maintained in this paper that the deficit is not simply a “government” problem — because a representative government can do little to balance the budget if the people are doing all they can, not only to reduce their tax liabilities but also to demand a continuous increase of benefits from government. The deficit should thus be considered as a problem of the entire society and analysed accordingly. Also, it is not merely an economic problem, but also a moral problem. More specifically, from a general equilibrium viewpoint (i.e. both the public and the private sectors are considered), the federal budget deficit can be regarded as a consequence of a society that places a high value on individual economic freedom, economic efficiency, as well as on competition for economic success. This is the case because economic freedom and competition tend to create economic insecurity and immorality, both of which incline to cause government expenditures to increase, taxes to decrease, or both. Hence, a long term solution for budget shortfalls would depend upon the possibility of whether the society as a whole can be made more economically secure and moral without the unnecessary encroachment upon individual liberty and upon the opportunity for competitive success.