Chapter 14: Q. 3 (page 319)
It may be argued that the effects of a higher public debt are the same as the effects of a higher deficit. Why?
As a result, a fiscal deficit results to a public debt.
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Take a look at Figure 14-1. During the brief green-shaded intervals, is the amount of the U.S. net public debt more likely to be increasing or decreasing? Explain your reasoning.
To which key set of expenditures do you suppose that "other things being equal" definitely applies in the government's projections displayed in panel (b) of Figure ? (Hint: Which types of expenses does the government often refer to as "non controllable"?)
Why do you suppose that governments do not rely on asset sales as a major revenue source over many years?
Take a look at the most recent years of data on the net public debt displayed in Figure 14-3, and then examine the most recent years of data on federal budget deficits shown in Figure 14-2. Why do you suppose that the net public debt as a percentage of GDP has grown more slowly recently than was the case between 2008 and 2015 ?
Under what circumstance would the transfer of U.S. taxpayers' funds to holders of U.S. debt residing in Japan and China constitute a "burden" on future generations of U.S. taxpayers? Explain briefly.
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