Deficit neutral
"Friend: I am going to take off a few days from work and fly down to Bermuda for a quick vacation.
You: But isn't that expensive? Won't that just add to your growing debts?
Friend: Yes, it is expensive. But my plan is deficit-neutral. I have decided to give up that half-caf, extra-shot caramel macchiato I order at Starbucks twice every day. I really don't need that expensive drink. And if I give it up for the next three years, it will pay for my Bermuda trip."
Greg Mankiw explains deficit neutrality here.
You: But isn't that expensive? Won't that just add to your growing debts?
Friend: Yes, it is expensive. But my plan is deficit-neutral. I have decided to give up that half-caf, extra-shot caramel macchiato I order at Starbucks twice every day. I really don't need that expensive drink. And if I give it up for the next three years, it will pay for my Bermuda trip."
Greg Mankiw explains deficit neutrality here.
Comments