‘The existence of a budget deficit or a budget surplus tells us very little about the stance of fiscal policy.’ Explain and discuss. Adam Smith remarked in The Wealth of Nations concerning the...

‘The existence of a budget deficit or a budget surplus tells us very little about the stance of fiscal policy.’ Explain and discuss. Adam Smith remarked in The Wealth of Nations concerning the balancing of budgets, ‘What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom.’ What problems might there be if the government decided to follow a balanced budget approach to its spending?