The Change Mariner

Do Deficits Matter?

CNN:

In 2004, the U.S. federal budget deficit will likely be the biggest in history, with more big deficits in store for years to come. But should we care?

Some economists say we shouldn't, that they've never hurt the economy before and that they'll help the economy grow faster, paying for themselves in the long run.

Many more economists, however, say deficits eventually could threaten the economy by driving up interest rates and cutting into household income -- though that probably wouldn't happen right away.

On Monday, President Bush unveiled a $2.4 trillion budget proposal for the fiscal year 2005, a budget that includes expected deficits of about $521 billion in 2004 and about $363 billion in 2005.