Monthly Economic & Investment Market Commentary
On one side of the current debate we have those that say governments can and should seek to smooth the economic cycle by running surpluses when times are good. By taxing more than they spend, governments can pay down debt, and / or invest in vehicles such as sovereign wealth funds. Then when hard economic times hit, as the business cycle says they will, there is a greater capacity to support a struggling economy, including by running budget deficits to fund stimulatory programs. Opposing that view are those that see only a much more limited role for government, influenced by their belief that governments have a poor track record at best of intervening at the right time and in the right manner; a view for which there is much support, particular given recent experiences.