Manipulating a Budget surplus

    A budget surplus is not anything special. However its still politically desired due to the fact that deficits are normally viewed as taboo. A budget surplus is nothing more than tax revenue exceeding government spending. Meaning more in taxes was collected by the state than tax revenue was used for public spending.

   However, civil officials often argue that a budget balance is a sign of fiscal responsibility when in fact a budget balance have very little positive significance to the economy. It may be important on a local level since local governments must seek loans or grants from their central governments in order to acquire money. But from the central government's perspective, budget surpluses are irrelevant. Most governments find it difficult if not impossible to run a budget surplus. However if they could, it would not necessarily be a good thing. It would simply result with money being drained from the economy and into a government reserve. All things being equal, such a policy would result in deflation and monetary and economic contraction. Thus setting the nation towards a recession or worse.

  However we could probably manufacture budget surpluses to please doubters. We can manipulate how money is produced and transferred giving the government a budget surplus. The goal is simply for the government to collect more in taxes than it spent in public spending. But at the same time without reducing the nation's money supply. Thus something must take the place of fiat money to constitute money. The government opts to collect private stocks or bonds in the place of tax revenue. This way the government could claim it is running a budget surplus from the liquid assets it holds.

  The alternative is to produce more liquid assets from a private level to take the place of the central government note. Thus encouraging traders to buy and sell real assets using these stocks and bonds. That way as the central government note is being taxed from the nation's money supply, the money supply is still expanding through the expansion of stocks and bonds. However, this is much more dangerous because fiat money are usually necessary to prop up the value of stocks and bonds.

  All of this irrelevant however, since a budget surplus or deficit does not mean anything.