In the recent federal election, two parties promised a balanced budget while the winning party promised a temporary small deficit. Since then, in the new government’s first Budget, a large deficit has emerged, and the commitment to eliminate the deficit within four years has been dropped. In a poll following the Budget, we find that just over half of Canadians approve of the government’s revised position, so there remains widespread uncertainty concerning this issue. In this lecture, Professor Scarth aims to clarify three things: how much this controversy hinges on factual matters that can be sorted out by appeal to logic and evidence, how much this controversy concerns differing value judgements Canadians have about how much income redistribution across generations we want, and how much this controversy can be avoided by relying on the Bank of Canada, not the Finance Minister, to stabilize the economy.