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NEED HELP w/ ECONOMICS homework: What are some PRO & ANTI government deficit arguments?

M

Madcowz

Platinum Member
I have a macoeconomics assignment due in a couple hours, and wasn't able to finish it b/c I had to study for a test that I just got back from, so I could sure use your help! Here's the problem:

Do a research on attitudes towards government budget deficit in the economic literature and public policy debate. Try to find and list as many pro-deficit and anti-deficit arguments as you can. Organize your answers around main points and briefly explain each argument.

Basically, find points AGAINST the budget decifit (ex - leads to higher interest rates), and FOR the the deficit (helps boost economy).

I can't really think of much else other than the examples I can up with

Any ideas?
 
Against : costs more money to pay off overall
For: Money can be put to work elsewhere, but i suppose that could go under boosts economy =\
On second thought, these really suck 🙁 sorry
 
i took a macro econ class here at ucla, and well though government deficit spending looks good short term, in the long term there really are no pros to it because it increases the national debt and makes us have less money for capital investment in the long run . something like that. capital investment in infrastructure and stuff doesnt show up right away but spending money on random things tends to .
 
you could think like a keynesian and say that gov't spending has a lot to do with the economy. if you keep it gov't spending constant and the economic cycle started up you would automatically go into debt or surplus with the economic cycle. if you're in surplus you're a drag on the economy, keeping it from overheating. if you're in a deficit you're pumping extra money into the economy, keeping the deficit from getting as deep as it would with a balanced budget. basically, gov't spending is used to keep the economy in a flatter curve than it would otherwise be. which leads to more certainty for business, which is one of the real driving factors behind economic performance.
 
It's short term goodness vs. long term goodness...Gov't deficit => More Gov't spending and transfer payments (soc sec, welfare) than taxes => Good in the short run/bad in the long run

Gov't surpluss => Less gov't spending and transfer payments => Bad in the short run/good in the long run
 


<< They don't still teach Keynesian Theory at any accredited Colleges any more do they? >>


I took both intermediate and advanced macro theory.

We spent about one week in intermediate, and maybe two to three weeks in advanced talking about Keynesian Theory.
 
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