How come there is no such thing as a one-handed economist? Because economists always say, “On the one hand you have this, and on the other hand you have that.”

That’s an old joke in the profession, and purveyors of the dismal science are always taking the wrap for being just this indecisive. But the truth is that an economist cannot come to a sound conclusion when two alternative scenarios are vying for dominance. They must use both their hands to massage all the data if they are to get a firm handle on the economic outlook.

Accountants, as a matter of practice, also must use two hands, although their margin for error is much smaller. Whereas economic forecasts can be either close to or wide of the mark, accountants are held to strict standards of accuracy. As a result, professional accounting relies on the balance sheet — the key to making sure that one and one make two.

Balance sheets are important tools for evaluating the events or cash flows that affect corporate finances. They are based on the age-old rigor of double-entry bookkeeping: For each entry on the asset side of the balance sheet there must be an equal offset on the liability side. Take, for example, a bank. When a bank makes a loan it has an asset, but at the same time the loan creates an equal deposit that is a liability. These must be in balance, hence the name “balance sheet.”

If we take this simple notion and apply it to the economy, we should witness similar results. For instance, when a government spends money on an aircraft carrier, an asset (the aircraft carrier) is created. Over time, government spending will create an enormous trove of assets — buildings, national parks, defense systems, etc. — that can continue to exist for many years and better the lifestyles of our children and grandchildren.

But there’s a hitch: the politician who has little, if any, economic or accounting knowledge. There are many such politicians running around Washington, D.C., people who forget or ignore assets when evaluating the impact of budget deficits on the economy.

Indeed, the boogeyman strategy of scaring the American public about how deficit spending is eroding the future for our children ignores all of the assets that have been built with increased government spending and, when necessary, borrowing. Such assets add to our future well being. To say that deficit spending simply detracts from our potential is like a homeowner viewing the liability of his mortgage without considering the asset value of his home.

Politicians veer down this wrong path when they ignore the two-handed impact of such deficits. For example, when an American buys a Toyota, he exchanges one asset with his Japanese counterpart, who in turn gets the equivalent of an I.O.U. for future purchases of U.S. goods and services. And when the counterparty decides to convert future goods into current goods, the transaction will create job demand and increase economic activity here at home. Liabilities? These deficits are valuable.

There is a timing element to all this. Current trade deficits create future economic growth. By ignoring the value of the demand for future goods, politicians try to scare Americans into believing that the foreign creditor will pull the plug on our financial credibility and the dollar will come crashing down. If that expectation were true, foreigners who fear a declining dollar would begin to convert those dollars into goods and services quickly, thereby accelerating U.S. economic activity. Since economic strength contributes to a stronger currency, the increased economic activity would reverse any dollar decline. And if foreigners decide not to buy those goods and services from the U.S. and the dollar falls in value, foreign holders of these dollars would be penalized — not U.S. individuals.

That’s the “two-handed” deficit analysis, and it makes a lot more sense than self-interested political warnings about the direness of our financial future.

Just as accountants are required to use both sides of the balance sheet, politicians and economic prognosticators should be held to two-handed account. If the liabilities implied by much of today’s deficit analysis were matched with the assets (both tangible and intangible) created by the government and foreign spending, wrongheaded rhetoric would quickly be replaced by responsible and balanced discussion.

– Thomas E. Nugent is executive vice president and chief investment officer of PlanMember Advisors, Inc., and principal of Victoria Capital Management, Inc.