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The Pros And Cons Of Running A Deficit

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Throughout this paper, we will confront the issue of if The Federal Government should never run a deficit along with if a law should be enacted to state this. Through this work we will be exploring what a deficit is, the positives and negatives as well as my overall opinion on the matter. Firstly, the concept of a federal government running a deficit this is the case when the government is over spending, exceeding its budget or what the it takes in through taxes, fines, penalties, extra over a given period of time. With all this extra money that is being spent the government has to be able to obtain it from somewhere. The government does this by selling bonds to willing buyers. Though this does not make economic sense running a deficit is not always a bad thing. In the case of a recession the deficit spending through the purchase of goods and services by the government can help the country out. This can help stop the countries spiral down, turning the country back around therefore stabilizing the economy. Through these types of situations many believe that running a deficit can be a very positive …show more content…

When the government over spends and starts having to pay interest the future availability of spending is reduced. Thus if the government did not need to go over budget and does it is the availability of future projects and services, this is not something the public would want. As well as if over spending is done before the country is beginning an economic downward spiral the government will have to raise taxes as well as reduce services causing even worse conditions and digging a deeper hole. Another negative that can come is a reduced investment in the country. With the country unable to provide to build utilities such as dams and power plans, investors will not be wanting to buy stocks in local companies and sell stocks in excising companies making is harder to pay off

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Before the depression, the government did not involve its self in the economy too much, which caused America 's future economy to become weak and collapse after the market crashed and many other problems. The fiscal policy was put into order to prevent the economy from collapsing and to stabilize it. The policy was used to plan for the future, which would have still been in a great depression for longer than

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The analysis made by Gordon in his book is consistent with arguments made by to have a bank that would be effective in the utilization of the powers authorized from the government as was implied in the constitution . In his factual analysis, Gordon asserts that the Congress or the politicians in general had presented failings and they could not be trusted with controlling the federal deficit. According to Gordon, the problem is not the size of the debt. The real problem is the lack of the political will to either have the taxes increased or cut the spending so that in the times of prosperity and peace, the national debt can be

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Many of them, like the WPA, spent lots of many making new jobs or building roads and other buildings. One overall effect of the government practicing the act of deficit spending could cause inflation. During the Great Depression, many people had already gone poor due to the stock market flash. If inflation were to occur it would give the people that lost their money a hard time to buy food, which means supporting a family. In other cases, deficit spending could also cause the taxes to increase to drain extra money out of the economy (Investopedia, 2017).

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The United States is currently in debt for over 18 trillion dollars. National debt has more than doubled in the past 12 years alone. Debt has accumulated from the high costs of healthcare programs, the Social Security program, and National defense. National defense costs have been especially high due to the Afghanistan and Iraq wars. Taxes are simply not creating enough income to pay for these pricey expenses.

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