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Unformatted text preview: As with the budget deficit, there are a number of different views regarding the national debt. Some believe that the national debt is a significant strain on economic growth, while others minimize the possible effects of the national debt. With the national debt in the United States in the many trillions of dollars, the effects of a significantly reduced national debt seem far off and theoretical, yet in reality they can serve as very important goals for policy decisions. Instead of analyzing the many views regarding the national debt, we will focus on the truths about the national debt and let the relative merits of the positions fall into place. The most important effects of a national debt are on the supply side of the economy. That is, because a large national debt increases the interest rate, investment falls as the national debt increases. That is, a large national debt today will result in less capital, national debt increases....
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- Fall '10