Our last blog post we posed (and then answered) the question, “What Does the 2015 Federal Budget Do for Your Small Business?” We mentioned that 82% of CFIB members supported the introduction of balanced budget legislation. But what exactly is a balanced budget?
Good ole’ Wikipedia describes a balanced budget as:
A balanced budget (particularly that of a government) refers to a budget in which revenues are equal to expenditures. Thus, neither a budget deficit nor a budget surplus exists (“the accounts balance”). More generally, it refers to a budget that has no budget deficit, but could possibly have a budget surplus. A cyclically balanced budget is a budget that is not necessarily balanced year-to-year, but is balanced over the economic cycle, running a surplus in boom years and running a deficit in lean years, with these offsetting over time.
A simple and accurate explanation, yet there is still a lot of confusion surrounding the term “balanced budget”. How is it that we can have a balanced budget and still be in loads of debt?
In the Financial Post’s recent article, Federal Budget 2015: Small business comes out the big winner, they included a video that explains what a balanced budget is…and isn’t. Why it’s balanced and yet we may still have a surplus or, more likely, a deficit.
Check out the video (it’s the second one) in the article and let us know what you think! Just leave a comment below.