An annually balanced government budget is a

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An annually balanced government budget would be a destabilizer because it would result in pro-cyclical fiscal policy. When the economy is doing well, the government would have to increase taxes or cut spending to balance the budget, which would reduce aggregate demand and potentially lead to a recession. Conversely, when the economy is in a recession, the government would have to increase spending or cut taxes to balance the budget, which would increase aggregate demand and potentially lead to inflation. This pro-cyclical fiscal policy would exacerbate business cycle fluctuations rather than smoothing them out, making an annually balanced budget an unsuitable stabilizer.

An Annually Balanced Government Budget Is a