Ah yes, the Swabian housewife fallacy:
https://drodrik.scholar.harvard.edu...es/the_political_economy_of_ideas.pdf#page=31
(aka the idea that governments should behave like ordinary households and at all times balance their books).
This reasoning is often invoked by demagogues who wish to cut public spending in order to enrich their powerful friends, as in Britain. But it's nonsense, and premised on a misunderstanding of basic macroeconomics.
It does resonate, however, because it is a simple story that makes emotional sense to people forced to endure austerity. People who fancy themselves hard-headed, and moderate, and practical are also particularly susceptible, as this thread demonstrates - but a self-styled wise man such as yourself should probably be a bit more skeptical ; )
The reason why it is this incorrect is because of the principle of sectoral balances:
https://en.wikipedia.org/wiki/Secto...in_the_view_of_the_sectoral_balances_approach wherein public surpluses effectively by definition result in private deficits. Or in simpler terms, when government runs a surplus, households and businesses lose out. And we can see this borne out time and again: in the Eurozone, where budget deficits are legally prohibited beyond a trivial amount, and where Germany, the Netherlands and some Nordic countries are all racking up huge surpluses, economic growth has been neglible since the crash. Germany, despite likely the largest per capita public surplus in the world, is probably already in recession, yet again. This also explains why UK austerity always failed to meet its own deficit targets, because the economy contracted from the cuts faster than the Tories and Lib Dems could cut further.
Meanwhile, in China, Australia, Japan, and to a lesser extent the US, countries which stimulated growth through deficit spending, the economy recovered far more quickly than in the UK, which famously had the worst response to a recession since Napoleon, precisely because of Tory/Lib Dem austerity.
It might sound counter-intuitive, but it's one of the most basic principles of macroeconomics:
https://www.imf.org/external/pubs/ft/fandd/2014/09/basics.htm and the divergent responses to the crisis once again bear it out.
Now it is true that deficits can become a problem, but usually only in developing countries which tend to borrow money in foreign currencies. It is just about unheard of, however, for countries like Britain or America, which control their own currency and which are regarded as safe by the financial community, to get into this sort of trouble. You might have missed it, but the Bloomberg post I shared describes how most Western governments can now effectively borrow at a profit!, because interest rates are lower than inflation and in some cases actually negative. As it states, there has essentially never been a better time for government to borrow, in order to pursue necessary reforms addressing poor infrastructure and public services, climate change, and inequality. Or, in other words, we can easily fund substantial and sorely-needed investment, and still be well within our means.
Labour is the only party in the UK that understands this, and its deficit spending on infrastructure is exactly what is needed, not least because the UK economy is stalled from Brexit, and likely to enter recession (and in case there has been any confusion, my support for Labour is based on this, and not any cultish love of Corbyn). That said, it is encouraging to see the Tories finally lurching toward basic economic competence, at least if the Javid budget is anything to go be.
Labour has admittedly been a bit creative in their infrastructure accounting, on the grounds that it is too important to be interrupted whenever right-wing demagogues or free market ideologues get back into power - but I'm sure a man such as yourself, who fanices himself wise and everyone around him stupid, should appreciate the logic ; )
If you don't want to take my word for it, you might give this a listen - I would be curious to know what you think. He explains all of this much more clearly than I can:
https://www.grandoldteam.com/forum/threads/the-labour-party.104565/page-418#post-7302654