Red is the new Black

                The historic precedence of governments needing to maintain a balanced budget is now a mere tale of the past, and for a majority of our own countries life the United States has been no better at restoring that lost standard.  But, is such a standard necessary in our globalized age, and does the lack of a budget limit our choice of actions in our foreign policy?  These are the problematic questions that are not so widely touched upon, which is mainly due to the common misconception that such questions could be answered simply by means of common sense.  This is not the case however in an ever globalized world where credit is as wildly available as oxygen, and red is the new black.  As it is for the United States which finds itself in a sustainable temporary budget deficit that has gotten us through two wars and a recession sizable to the great depression.   And, despite historical precedence the continuation of our budget deficit would remain in the best interest of our nation’s foreign policy.

                For centuries during the peak of the gold standard it was customary for nations of all kinds to run their budgets in the black.  However in times of recession, war or negative out flow of national gold levels, nations would have to accept a temporary budget deficit until conditions reversed.  A nation running a deficit did not have the luxury of a globalized credit market as we have today.  Rather they were more reliant upon painful budget cuts that weakened their national stance in order to meet years end.  This has since been reversed over the years with nations such as the U.S., Japan, and even China demonstrating this change in book keeping.  This drastic change of fiscal responsibility by nations if properly managed can be sustainable and even healthy for a nation when compared to restrictive methods such as austerity measures.  In the case for the U.S. which has seen a change in its deficit from 2009-2014 by approximately -11.4% annually and has seen an averaged growth of 7.25% in revenue over those six years.  Helps to offer validity to those prolonged periods of deficits spending in contrast to other wise painful budgetary cuts that may undermined national security and domestic growth.  Such cuts could pose a threat to an over inflated U.S. military budget, or counter the efforts of the U.S. in maintain its expensive foreign aid policies.  Either of which would weaken the respective influence that the U.S. wields in conducting its foreign policy.  Any drastic changes could result in not only a negative change in our global influence, but also may raise a question about the stability of the United States as super power. 

                If permitted to continue our temporary deficit the due cost of our debt is a more reasonable cost when compared to the previously stated dangers of budgetary corrections.  Annually the U.S. has paid an average of 2.43% (2013) on public debt according to the Treasury department, which is a substantially low interest rate when one considers the scale of U.S. public debt.  So, in weighing the benefit and the cost of the U.S. to maintain and even continue running this now 14 yearlong deficit streak, I believe it is in the best interest of our foreign policy to let the red ink flow.  Because the best choice isn’t always common sense, and although the numbers can be imposing it is crucial that the U.S. maintain a picture of stability even if that means accepting our as a strength instead of a weakness. 

---Nathaniel Dust---