Why is a surplus in the treasury bad?

Question

i was reading my history textbook and it said that "the treasury was running an annual surplus amounting to an embarrasing 145 million"

i always thought that extra money was a good thing

Answer 1

Extra money in a government treasury takes away money which would otherwise go into building up private businesses and generally growing the country's economy.

Answer 2

It's embarrassing because the government is effectively a non-profit organization.  If it is taking in more money than it can use, it should take in less.  If there is only one situation in which taxes should be lowered, that is it.

Of course if the US government started running a surplus now, it would have "pay down the debt" as a use for the first few trillion that comes in, so it can easily avoid the embarrassment of too much money in the treasury. :)

Answer 3

Least we forget, paying down the debt will reduce the money supply. And that will cause deflation.