Budgetbalancen

Budgetbalancen is a term used in public finance to describe the objective and practice of keeping public sector budgets balanced over a given period, typically a fiscal year. In this sense, a balanced budget is achieved when general government revenues are approximately equal to expenditures, excluding or including interest or capital investments depending on the rule used. In public finance, several measures are used to assess balance: the nominal budget balance; the structural (or cyclically adjusted) budget balance, which strips the effects of economic fluctuations; and the primary balance, which excludes interest payments on debt.

Policy tools: Governments pursue budget balance through revenue policies, expenditure controls, and one-off measures; they may use automatic stabilizers (tax revenues rising in expansions, welfare spending falling in contractions) and discretionary measures in cycles. Many jurisdictions implement fiscal rules such as a balanced-budget rule or debt brake. In practice, achieving a budget balance may require borrowing to finance capital investment under the golden rule or limits on debt growth.

Arguments and debate: Proponents argue budget balance strengthens fiscal discipline, credibility, and macro stability, while critics warn it reduces counter-cyclical capacity, risks procyclicality during downturns, and may delay necessary public investment.

Related concepts include fiscal rules, structural balance, and cyclically adjusted balance.