Principles of Economics- Mankiw (5th) 777

Principles of Economics- Mankiw (5th) 777 - CHAPTER 34 F I...

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CHAPTER 34 FIVE DEBATES OVER MACROECONOMIC POLICY 803 W HEN POLICYMAKERS FACE GOVERNMENT budget surpluses, they have three op- tions: cutting taxes, increasing spend- ing, or reducing the government debt. Choosing is not easy. Lawmakers Discover That Surpluses Can Be as Vexing as Deficits B Y D AVID W ESSEL AND G REG H ITT W ASHINGTON —It took politicians 15 con- tentious years to eliminate the biggest federal budget deficits since World War II. Now, they are having nearly as much difficulty deciding what to do with the roughly $3 trillion in surpluses pro- jected over the next 10 years. The sudden emergence of a budget windfall larger than anticipated just six months ago is forcing into fast-forward a longstanding debate over fiscal policy and the role of government. On the surface, lawmakers face a simple multiple-choice question: Should the surplus be saved, spent, or devoted to tax cuts? But at its core, the debate is about profound issues that were
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This note was uploaded on 08/01/2010 for the course ECON 120 taught by Professor Abijian during the Spring '10 term at Mesa CC.

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