The former head of the Australian Treasury claims that: “Everybody knows the budget should be in surplus right now.” Well last time I checked I was still part of the body of humanity and I don’t know that. In fact, the fiscal balance is currently recording a deficit (which should be referred to as a net public injection of financial assets to the non-government sector) which by all indicators is not large enough. The commentators that are blindly repeating the former Treasury head’s assertion really haven’t much idea of how the system works and what the implications of a shift to surplus would have for the overall prosperity of the nation and its people. They blindly rehearse fictions about fiscal deficits pushing up interest rates and leaving future generations worse off. The reality is that if the Federal government could somehow move to surplus, there would be a recession and the number of available workers who were either unemployed or underemployed (currently 10.9 per cent of the available labour force) would rise significantly. That would undermine the well-being of tens of thousands of workers and their families. The call for fiscal surpluses completely ignores the macro linkages that bind the sectors in the economy together. Such a shift would amount to criminal neglect.