In 2006, current Speaker of the House of Representative Nancy Pelosi
Problem 3
In 2006, current Speaker of the House of Representative Nancy Pelosi said that the deficit is the biggest drain on the next generation (Rogers and Lueck, 2006). Under what conditions is Representative Pelosis comment correct?
Hint
Accounts & FinanceAmerica is now on a dangerous budget path as current spending and debt are dangerously high, and future spending and debt are on track to rise even higher in large part because of increasing entitlement spending. Academic research has also shown that the advanced economies like the USA are at risk of significant and prolonged reductions in economic growth when public debt rea...
America is now on a dangerous budget path as current spending and debt are dangerously high, and future spending and debt are on track to rise even higher in large part because of increasing entitlement spending. Academic research has also shown that the advanced economies like the USA are at risk of significant and prolonged reductions in economic growth when public debt reaches levels of 90 percent of GDP. Also, high public debt threatens to drive interest rates up, to crowd out private investment and to raise price inflation, so, the implications would be severe and pronounced for all Americans, and most especially for the elderly, the poor and the middle class. And, U.S. policymakers should learn from Greece and Japan specifically to avoid a fiscal crisis and economic stagnation brought about by public debt overhang.
Login | Sign Up
