- We must do all we can to keep the days of deficits in the past. Budget deficits force the Government to borrow money in the private capital markets. That borrowing competes with (1) borrowing by businesses that want to build factories and machines that make workers more productive and raise incomes, and (2) borrowing by families who hope to buy new homes, car, and other goods. The competition for funds tends to produce higher interest rates.
From the White House produced Citizen's Guide to the Federal Budget, 2001.
(thanks to innerlooper)