Economically, the federal government is not a private business - a balanced budget, macroeconomically, is not really a good idea. Not requiring a balanced budget gives government the opportunity to smooth out business cycles. During a recession, extra government spending can get the economy moving again. During very good times, increasing taxes, interest rates, etc., can keep the economy from growing at too great a rate. I've only taken a few business/economics courses, but from what I understand, Bush should have raised taxes on the rich, not cut taxes. Further, how can you ever go to war if you're required to have a balanced budget. "Hey, everyone, this year we're going to have to raise your tax rate to 70%. Anyone making less than 50k per year, you're probably going to starve and/or lose your home." But, you certainly don't do both: go to war AND cut taxes.