Balanced Budgets

A balanced budget refers to a budget in which revenues are equal to expenditures.

In accounting, revenue is the income that a business has from its normal business activities, usually from the sale of goods and services to customers.

A budget is a quantitative expression of a plan for a defined period of time.

Balanced Budget 2017 - MSP by ProvinceofBC

Thus, neither a budget deficit nor a budget surplus exists.

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.

The business cycle or economic cycle is the downward and upward movement of gross domestic product around its long-term growth trend.

Balanced budgets and the associated topic of budget deficits are a contentious point within academic economics and within politics.

Most economists agree that a balanced budget decreases interest rates, increases savings and investment, shrinks trade deficits and helps the economy grow faster in the longer term.