Politicians and the media blame the deficit for economic ills ranging from high interest rates to low economic growth, but little attention is paid to the reasons for such effects. Uniting the various strands of economic, legal and political analysis of deficits in order to lay the foundations for rational public debate, the author shows that the deficit statistics usually published have little economic content. They ignore taxpayers and the recipients of benefits, and since they only look at current cash flow, deficit statistics ignore long-term trends such as pending Social Security and Medicare insolvency. Nevertheless, Shaviro believes that deficits matter because they have generational and macroeconomic consequences. He argues that it is hard to tell whether these consequences are good or bad, since this depends on future economic conditions impossible to predict. Moreover, even if deficits contribute to excessive government spending, a balanced budget amendment is likely to prove ineffective or even counterproductive. He concludes that Social Security and Medicare reform will be necessary within the next few years.