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Unformatted text preview: a large national debt, because all of this economic activity--including the interest payments--is predominately between agents in the US, the harmful effects of the national debt and the budget deficits are minimized. There is a fringe party in the national debt debate who believes in debt neutrality. That is, they believe that the national debt has little or no effect on the economic wellbeing of the public because the public saves and spends in accordance with long-term economic goals. According to this position, if the national debt is high, citizens will save more to allow this debt to be attacked in the future. While this view is theoretically important, its practical importance is questionable as it relies on a fully informed populace. It is much more reasonable to accept the views that acknowledge some effect of the national debt on the economy....
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This note was uploaded on 02/09/2012 for the course ECO ECO2013 taught by Professor Jominy during the Fall '08 term at Broward College.
- Fall '08