"Ofsted requires them to have a certain amount of surplus in order that they have financial viability," he says.
A crucial measure is the primary budget balance (ie, before interest), which needs to swing into surplus in order to prevent debt from spiralling out of control.
But China's real problem is that it is running a persistent current-account surplus; in order to keep the yuan closely tied to the dollar it has to keep buying more dollar assets.
Somehow, governments must return to budget surplus in order to maintain market confidence and create room for future bank rescues, while remaining conscious of the potential blow to growth from dramatic short-term austerity.
Mr Osborne was committed to an "ideological plan" and wanted to run a £23bn surplus in order to "cut the size of the state" to a level not seen since the 1930s, Mr Balls said.
That would be the pragmatic approach but unfortunately you also have a lot of dogma in there whereby they say that no you have to live below your means, you have to try to generate some kind of surplus in order to do that".
Against the advice of financial analysts, as well as then-governor Pataki, the MTA decided to use the budget surplus in order to justify giving half-fare rides for the holiday season, drawing heavy criticism from both sides of the political spectrum.
Governments need to run primary (ie, before interest payments) surpluses in order to pay off existing debt.
You raise debt or you increase or reduce deficits and surpluses in order to improve economic growth.
Some heavily indebted economies, like Germany, faced pressure to begin running large current account surpluses in order to pay back loans.
Many developing countries are running current-account surpluses, in order to be less dependent on foreign capital than they were a decade ago.
