Balanced Budget

A balanced budget might not be a very common thing, but the concept is pretty simple. A budget is said to be balanced when the amount of money taken in by a government (or a household) is equal to the amount spent. The balance of a budget is usually measured over a period of time (often a fiscal year), so that a budget might be “balanced” even though there was a deficit at a certain point during the year, as long as that deficit was balanced out by a surplus at a different point in time.

Although politicians often tout their plans to balance the budget, some economists, including Nobel Prize winning economist William Vickrey and former Secretary of Labor Robert Reich, argue that balancing the budget is not a necessary step toward economic health for a nation.