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Uncle Sam Bleeds Red: How Government Budget Deficits Affect the Macroeconomy
Borders, Josh
Borders, Josh
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Date
2019
Additional date(s)
2019-12-18
Abstract
There is, perhaps, no greater point of contention among macroeconomists than the topic of government budget deficits-- are they harmful, helpful, or does the answer depend on the conditions of the economy at the time of the deficit? Additionally, political attitudes toward fiscal policy oscillate frequently, from "deficits don't matter," to "deficits will bankrupt our children." This paper investigates the assumptions underpinning both views, finding that, at least in a country with the sole authority to create its own currency (like the United States), deficits often have positive economic outcomes, leading to higher employment, GDP, and standards of living.
Contents
Subject
government spending
macroeconomics
budget deficit
crowding out
macroeconomics
budget deficit
crowding out
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Description
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Department
Economics