Baseball Crank Covering the Front and Back Pages of the
Newspaper May 24, 2012 POLITICS: The Growth Deficit and Spending
Fairy Tales    I. Operating Deficits and Credit Card Balances
We're all familiar with the budget deficit, the measurement of
how much more the federal government's annual operations spend
than the government takes in. I refer to this as the "operating
deficit." The operating deficit has really only one important
role: it tells us how much of the government's spending will
lead to the issuance of new debt. While large operating deficits
can be a symptom, they are not the real problem. Let me
illustrate with a simplified example. Let's say you have a
credit card with a fairly low teaser rate, 2 or 3%. You are
running a balance on that card instead of paying your bills on
time, which means you're paying a modest interest rate and the
balance is accumulating. In terms of your credit card spending,
you have an operating deficit - you've spent more than you paid
back. But in this example, the am