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Unformatted text preview: that they are finite—income stream eventually will stop-government income stream is infinite-infinate income horizion they have an infinite horizon to make payments—thus they will never have to pay back c. Structural and passive deficits d. Real and nominal deficits-most important-real deficit= nom deficit – national debt (rate of inflation x national debt)-to get rid of= low rate (BAD—ruin economy) 3. Financing deficits-US government borrows bonds-buys bond=lending -retirement (asset) relative, risk free—safest asset to have (security) 4. And future generations a. Myths b. Realities-MUST make payment 5. And economic policy a. Monetary b. Fiscal 6. Conclusions THE END...
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- Fall '07
- Deficit, national debt, budget deficits, United States public debt