How in the world did the US Federal government ever achieve a balanced budget and how can they go about ever doing it again?

Question

Follow up: is it realistically achievable ever again, and should it even be a goal to be concerned with?

In: Economics

Answer 1

The government is not like a household. The US government can quite literally never run out of money. The people working at the fedral reserve have stated as such. “balancing the budget” simply isn’t how money actually works on a governmental level in a country that produces its own fiat currency. The national debt is simply a difference between how much the government spends and how much it money it puts into the economy. If the government wants to make something happen, they will call up the fed who will credit the right account and the thing is done, which is as simple as pressing a few buttons on a computer. Politicians talk about balancing the budget because either they know how it actually works and are duping their base, or they genuinely don’t understand how this works. Look into modern monitary theory for more information.