There is a pleasing myth about the business cycle. This is that it is just a fluctuation around an underlying trend. Output in a boom is above a sustainable level. In a recession it is below it. Budget deficits in the recession phase can be and should be offset by surplus in boom years. Whether you are optimistic or pessimistic about stabilisation policies they exist in a sphere of their own, and economic policy can concentrate on so called “supply side” measures.