Greg Mankiw has a list of propositions that are broadly agreed upon by economists (hat tip: Andrew Sullivan). I'm sure everyone has their favorite (depending on ideology). For my part, I'd like to highlight and comment upon the following item:
8. If the federal budget is to be balanced, it should be done over the business cycle rather than yearly. (85%)If I'm reading this correctly, what this principle means is that the government should pay down the national debt when times are good, and go into deficit spending when times are bad.
This is an important principle worth remembering, and one that, unfortunately, politicians of a certain political stripe are none to fond of following. You will recall that when Bill Clinton left office, he left George W. Bush with a significant budget surplus (over $200 billion) and from the start George W. Bush eyed that surplus greedily, like the prodigal son desperate to get his hands on his generous inheritance. So instead of doing the proper thing and continuing to pay down a 5 trillion dollar debt (that Bill Clinton had largely inherited from Ronald Reagan and G. W. Bush's own father) candidate George W. Bush announced in the presidential debates of 2000 that he had plans for every last nickel of that surplus, none of which involved paying off any debt:
GEORGE W. BUSH: Well, we do come from different places. I come from West Texas. I have been a governor. The governor is the chief executive officer and learns how to set agendas. I want to take one half of the surplus and dedicate it to Social Security, one-quarter of the surplus for important projects. And I want to send one-quarter of the surplus back to the people who pay the bills.So as the GOP furiously pounds the table and loudly protests the necessary spending that is contained in the Obama stimulus package, it is worth reminding the party of recklessness that the last time they were handed an opportunity to put a dent in the Federal debt, they squandered that opportinuty with shameless glee and a grin on their faces.