This is especially useful during a recession, as this can stimulate jobs, increase businesses, private investment ventures increase, and consequently, the nations economy rises. Affects government's long-term financial sustainability. Furthermore, a high national debt is bad for the country and citizens. }r"u@[$vFv0@H4 Deficit spending refers to government spending exceeding what it brings in federal income and corporate taxes during a certain period. `tR@ko,vLW >NE; Complete this essay in a Microsoft Word document, and inAPA format. The two main causes of deficit financing are excessive government spending and low levels of taxation that don't cover expenditure. A deficit is a shortfall in revenue for a particular years budget. WebKey Terms. WebDisadvantages Of Deficit Spending. The money that is borrowed is then put back into the economy through government spending. WebAdvantages and Disadvantages of Deficit Spending. The main reasons for the government to do something like this would be to stimulate growth and stability in the economy. For this article, we will discuss the advantages and disadvantages of deficit spending in the context of government, where a governing body of a nation that is in recession needs to borrow heavily from other nations or financing entities in order to spend on infrastructure. https://greengarageblog.org/6-pros-and-cons-of-deficit-spending Deficit spending can lead to a bad economy: A nation will typically have none of the savings during the deficit time, for they must prioritize paying off the interest and debt. the short-term I believe that it would lower the economys growth and reduce the possible debt. Subsequent measures need to be taken to pay off the debt and increase the internal revenue. (This is the multiplier effect). _^W@;tD_N_pbO6N"]]%W)6#m%NrsM=FQ{A^5Ri"ojyY,>t-cGm ;k 5pP [~?vF Most economists accept that deficit spending is desirable and necessary as part of countercyclical fiscal policy. Still, the state will have enough security and enough capability of spending. Structural budget deficit. Reflects past government decisions and economic conditions. There are advantages and disadvantages to deficit spending that we will discuss further below. As the government borrows more money, this increases the national debt. The theory is outlined in the following paragraphs, along with its positives and negatives. So, there are not too many good options available to resort the health of the national economy. When a person or the government spends more than he/it makes, the concept is referred to as deficit spending. Prices rise more than usual, this leads to inflation. Additionally, it might have also had to sell off its land and other important assets to transform it and be able to pay off its debts (Mursa, 2014). Macroeconomics; Deficit; Great Depression; Keynesian economics; deficit spending; American Public University ECON D002. Despite its benefits, however, the trade deficit can result in a dampening impact on an economy in the long term. And with more developments happening in a country, more investors will be attracted, thus opening up more jobs and increasing revenue and economic growth rate. A nations economy reflects that of its own businesss cycles, experiencing periods of expansions and recessions over time. TheKeynesian perspective is important to touch on Deficit spending hence increases government debt. Rising interest rates can crowd out (discourage) fixed private investment spending, canceling out some of the demand stimulus arising from the deficit Write an essay analyzing the advantages and disadvantages of deficit spending and the effects of federal government borrowing on the economy i.e., the crowding out effect. Advantages and Disadvantages of Deficit Spending. The war in Afghanistan cost $28.7 billion in 2001.The war in Iraq for deployed military costs $72.5 billion by 2003. This means that the government will decrease spending on public services and increase taxes to try to repay their debt. Difference between Time Study and Motion Study: What is Unique Amid the Two? Although there is a Deficit spending by the government is when the government spends more money than it is raising in taxes or generating from other sources over a given period. That is, to increase the amount of taxes for the working citizen or even raising the retirement ages. According to Kimberly Amadeo(2017) he said most people dont realize that wars create more deficit spending than the create recession. This excess spending needs to be financed through borrowing, likely from foreign governments. It may also have to sell off its land and other assets in order to pay off the debt. Since the spending increases, the economy tends to increase. Increase taxes, and Americans would have less money to spend. We also use third-party cookies that help us analyze and understand how you use this website. Deficit spending refers to government spending exceeding what it brings in federal income and corporate taxes during a certain period. The federal government outlays are divided into government outlays and mandatory outlays. Disadvantages Of Demand-Side Policy. References. There is a drop in the standard of living, ultimately resulting in a sorry state of affairs. According table 1.a[ GDP, GDP growth, inflation ] the growth of GDP has stable increase because consumer spending more actively on these few years . Lastly, Discretionary outlays compromise government spending that can be altered when the government is setting its annual budget. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Our site includes quite a bit of content, so if you're having an issue finding what you're looking for, go on ahead and use that search feature there! Deficit spending forces the government to have more control over spending: When governments need some payback from loans with high-interest rates, the administration will be more careful at any time when creating a budget and making investments (Mursa, 2014). Your paper should be structured as follows 1. Increased deficit spending has been a rational response from the government to keep as many people employed as possible and help the economy recover. So when there are emergencies, it will have no funds and must borrow from other nations or financing institutions again, creating a vicious cycle. Deficit spending hence increases government debt. Studies have shown that government spending has always been financed by public securities which are mostly the bonds. Cover page with a running head 2. Fills Deficit Gaps If a country has a balance of payments deficit, the IMF can step in to fill the gap. For instance, the administration in debt might have to change spending laws and policies. Reference. When the funds borrowed is used to increase the These cookies do not store any personal information. Privatizing the social security system can hinder all this from happening by funding the existing payroll tax, therefore avoiding and preventing any benefit cuts or tax increase. {CgMLk? The reform requires funds to move from a $1 fixed net asset value (NAV) to a floating NAV along with adopting liquidity fees and redemption gates. BhtG;g#82O .$rtd._f"'+Dc5F{a}GP_/v:ze@ Z,>P!bb5n@F$2yx]9xo~=5X'DxE2D[[FM@+2yq/PGBD When the economy is in a downturn, Causes the debt to increase. Since market demand will exceed market supply, deficit financing can lead to inflation, that is, a rise in the prices of all commodities. Government spending increases the scope of private investment, and the effects of public borrowing on the same are significantly erased. Lesser capital flow in the economy will case debts and borrowings come with interest. An outlay is an amount of money spent on something. Since the government needs to pay back the loan with high interest rates, it will be more careful when making investments and creating a budget. They need to make wise decisions when prioritizing projects and spending. Tax increases and spending cuts hurt the economy in the short run by reducing demand. Deficit spending hence 410 Words; 2 Pages; Feb 26th, 2021 Published we will discuss the advantages and disadvantages of deficit spending in the context of government, where a governing body of a nation that is in recession needs to borrow heavily from other nations or financing entities in order to Deficit is a yearly measure, while debt is a cumulative measure. The government can increase borrowing to obtain money from Assist the government to have better control on spending On the other hand, with the rise in unemployment, spending on safety net programs rise. Debt is a sum of money borrowed by one party from another. When the economy has high unemployment, an increase in government purchases creates a market for business output, creating income and encouraging increases in consumer spending, which creates further increases in the demand for business output. Due to decreasing in availability of funds with the government to invest in public spending, gain from investment will be reduced. Can be reduced through increased revenue or reduced spending. In economics, crowding out is an economic concept which explains as a situation where personal ingesting of goods, investments and services by the business are minimized because of the increased administration spending and deficit financing which sucks up the available financing resources increasing the interest rates in that nation (Keller, 2019). Deficit spending leads to a budget deficit. The cut in taxes causes a decline in revenue and thus results in a budget deficit or massive fiscal stimulus to enhance economic activities by increasing government expenditure, decreasing revenue, or a It is usually paid back with interest. Difference Between Product And Production Concept: Understand What is Different! An additional negative facet of full dollarization is the loss of seignorage, the difference between how much money is worth and how much it costs to manufacture it. However, apart from playing a stabilizing role, deficit spending has many disadvantages, including lower investments, inflation, as well as the crowding out effect. @dYoH7[ |p;vqwlGUm]{~2 T3&=t.wi8Y?zogc' a$vu4kaV!=0hL(F!Ook$=K Debt to GDP ratio is a measure of a country's national debt relative to its gross domestic product. This website uses cookies to improve your experience. What is deficit spending and why is it done. This is extremely problematic as during emergencies, there will be no stash to rely on. This can drive up consumer interest and have an overall dramatic effect on not only the economy but infrastructure projects as well. In our textbook, Principles of Macroeconomics, the relationship between debt and deficit is described. bqvXz{++/?Jq*IZZxww/4}B M9f/;@'xk__JY}+BV$"WRi3Sp3Bv[O/G~`Nf'}nwyx/:nac}_=1&k FRX. Advantages of deficit spending It increases growth in the economy According to In laymans terms, deficit spending occurs when spending exceeds income. Copyright 2014-2023 Testbook Edu Solutions Pvt. Deficit refers to the difference between government spending and revenue in a given year, while debt refers to the accumulation of yearly deficits over time. Running head: DEFICIT SPENDING 1 Deficits allow us to stabilize the economy (though its important we pay the bills when times get better), deficit spending can stimulate investment through crowding It pushes growth in the economy. We'll assume you're ok with this, but you can opt-out if you wish. This increases spending while not providing any benefits. If you are just starting to get you finances in order, its likely that budgeting is the first step. 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However, some economists argue that deficit spending can work effectively if the funds are spent in the right way and correct projects, which in the future will initiate national economic development. A tool for government to stimulate the economy during a recession. Key Takeaways. The national debt is held by a combination of individuals, corporations, and foreign governments. The increased government spending can help stimulate the economy as more money flows in, but the jump in borrowing can have an adverse effect of raising interest rates (Investopedia, 2013). Government borrowing under such circumstances increases the demand for borrowing and thus pushes interest rates up. As consumption increases, which leads to an increase in the companies income and a rise in tax revenue and government spending. Domestic Taxation: Deeper insights into the crowding-out effect(No. We offer the best custom paper writing services. In any nation, when more developments are happening, more investors across the globe look at the development phase and are therefore attracted to invest in the nation (Mursa, 2014). It is why experts consider deficits to be highly unsustainable and detrimental to long-term economic stability. Various advantages are offered by Deficit spending that is realized usually during a downfall or recession of economy. Mursa, G. (2014). This will make the structural deficit grow at a higher rate as compared to the economy of the country. Can be reduced through increased revenue or reduced spending. There are advantages and disadvantages to deficit spending that we will discuss further below. Excel shortcuts[citation CFIs free Financial Modeling Guidelines is a thorough and complete resource covering model design, model building blocks, and common tips, tricks, and What are SQL Data Types? Can be influenced by factors such as economic growth, changes in tax laws, and government spending decisions. There are both advantages and disadvantages of budgeting. Herbert Hoover, one of the economic experts, was openly against deficit spending around the Great Depression, because he believed that deficits would destroy the countrys foundations. 3. WebDeficit spending refers to government spending exceeding what it brings in federal income and corporate taxes during a certain period. Deficit spending refers to government spending that exceeds federal income and taxes over a period of time. Deficit spending hence Second, higher debt levels can make it more difficult to raise funds. Deficit-spending is currently funded by issuing bonds, which are bought by the private sector and in some cases by the Federal Reserve. Both impact a country's financial stability, Both can affect a country's credit rating, Both can be financed by issuing government bonds, Both can limit a country's ability to spend on other things, Both can result from government spending exceeding revenue, Both can lead to long-term financial consequences. When the funds borrowed is used to increase the development in a nation, it attracts more investors within a short period. Although it can happen to both individual and business, when government spends more and not able to balance the budget, we say it is deficit spending. I think that the bad outweighs the good in this situation. Keynes, of course, as mentioned before, supported deficit spending, especially when the country is financially downtrodden. Since a government will have the needed funds, it can spend on infrastructure and create more employment in the labor force. This helps much when it comes to recession period. ?`X07v;1 x]fr[_X#aj]7%XGyQ /kEGKBpm`,qocY{zc&0}hV s P:pwOH8Am]a \"iz2!LczFucrX=>>q+&X^=WmieU3 ! WebAlso in case of a recession deficit spending has been able to increase the financial plan deficit of a nation and lastly the deficit spending does increase the investment level of a nation, this involves raising the market value of the nations economy increase of its collapse in theshow more content However, there are situations when entities willingly incur deficits for some future benefit. Advantages of deficit spending Crowding-out Effect4. when government spending exceeds tax revenues. It forces the government to take more control on spending & expenditure. In most cases, the first increase in administration spending is funded through higher taxes or borrowing from other states with strong financial status. EuroAdvantages and disadvantages.CES Working Papers,6(3), 60-67. Affects the long-term financial stability of the government. The borrowed capital from other nations can also be used for public spending, like education or transport. Moreover, the availability of better quality foreign products also encourages domestic industries to improve their products quality. 6789 Quail Hill Pkwy, Suite 211 Irvine CA 92603. 7:> In layman's terms, deficit spending occurs when spending exceeds income. Affects the long-term financial stability of the government. Note your submission will automatically be submitted throughTurnItIn for plagiarism review. WebDisadvantages Of Deficit Spending. To cover this deficit, the government issues debt, typically Treasury securities. by | Apr 10, 2021 | Writing Services | 0 comments, Write An Essay Analyzing The Advantages And Disadvantages Of Deficit Spending And The Effects Of Federal Government Borrowing On The Economy I.E., The Crowding Out Effect. 6.62 lakh crore, which is 83% of the budgeted target for the whole year. These advantages hold true for your personal budget, and for the budget of the nation. History has depicted that a balanced budget does not guarantee a steady economic growth. Affects the current year budget. Can be reduced through increased revenue or reduced spending. According table 1.a[ GDP, GDP growth, inflation ] the growth of GDP has stable increase because consumer spending more actively on these few years . Another way to finance the debt requirements of the government is by printing new currency. Introduction 10, First Avenue,Muswell Hill,New York, United States. Weve got you covered. Both are often a subject of political debate. WebDefinitely deficit financing is capable of promoting economic development in developing economies. di'T2qX{.)FmR/c>4IKBjTy+7~1.bK[OB1b+ f}VK@Xo$G@1P7=O,^\R.kiisq ''K8Fc4#xq^}#ou/T"EOFbs}eY+)-i- ^k^] is/x xmx1;Qll>U7=yC OX\0X/`n#[Y-*Sl4!p.BbL8nCXMs'/p/d. American Public University. Affects the current year budget. This is greatly beneficial during a recession. Assignment 1: Deficit Spending During the Great Recession, like any other economic downturns, as unemployment rises, aggregate income declines causing a major decline in tax collections. External sources include getting a loan from foreign governments or international financial institutions, like the World Bank. Deficit Spending Another benefit of the privatized pension system is; it will increase the viability of the program., During the recession, rates spiked over concerns that short term lending to distressed financial institutions would backfire. This category only includes cookies that ensures basic functionalities and security features of the website. Reflects the total debt Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. The government can increase borrowing to obtain money from taxes or from foreign governments. Therefore a decrease in the government spending will cause an even deeper recession and a larger budget deficit. WebDeficit spending is used as an indicator of the financial health of the government. The government resorts to withdrawing money from its cash deposited in the RBI or orders the RBI to print new currency notes or borrows money from the public in the form of bonds and other securities. Governments can borrow money from the citizens of the country by issuing and selling government bonds. In other words, What does deficit spending require a government to do? As a part of its fiscal policy, a government often engages in deficit spending to encourage aggregate demand in an economy. But, the two are individual terms which dont necessarily overlap. What are the benefits of the CDT terminology ? Those programs that funds are normally cut by the government is the military, health care, education, and transportation infrastructure. These measures have been put in place to safeguard against a repeat of the crisis, which was met with massive outflows and one prominent money market fund breaking the buck, dipping below a $1, Full dollarization places a restriction on the role of monetary authority as the lender of last resort; because printing money is no longer an option, the central bank will need to find alternative measures to aid in times of financial difficulties. C\f?D/zlN#`El]0+ WebAdvantages of Economic Growth. A budget surplus occurs when revenue exceeds outlays. WebView Deficit Spending Course Hero.docx from ECON MACROECONO at American Military University. It leads to a phenomenon called the vicious cycle of debt, wherein governments have to take additional loans to pay off past debts. You also have the option to opt-out of these cookies. WebDeficit Financing can happen when the total income of the government (revenue account + capital account) falls below its total expenditure. It can risk national sovereignty. A debt is normally money that is owed or due and in the United States for Fiscal Year 2013 the budget deficit was projected at $901 billion, however, debt was more than $16 trillion at the end of 2012 (about.com, 2012). These cookies will be stored in your browser only with your consent. Advantages Deficit spending plays a significant role in fostering economic growth. It is considered one of the positives of deficit spending. Macroeconomics; Deficit; Great Depression; Keynesian economics; deficit spending; American Public University ECON D002. Whether used in government, economics, or finance, the underlying principle of deficit spending is the sameless income, more spending. Most economists accept that deficit spending is desirable and necessary as part of countercyclical fiscal policy. This is derived from Keynesian economics, and has been the mainstream economics view. The tremendous borrowing/spending power of the United States government can have either a positive or negative effect in both the private and public sector. The federal budget deficit is a much discussed and little understood subject in American politics. A country will typically have no savings during a deficit period since they must prioritize paying off the debt and interest. Advantages and disadvantages of a budget deficit (2019 update) Economics. Such shortages always necessitate the addition of debt to overcome them, and it makes an entity indebted to external parties. He prescribes they do so using their tool as fiscal and monetary, Introduction: What is deficit spending and how does it work To write about deficit spending you must under what is the meaning of deficit spending. Affects the long-term financial stability of the government. A nations economy reflects that of its own businesss cycles, experiencing periods of expansions and recessions over time. The pros and cons are decided on the interpretation; an advantage may be considered one until it gives beneficial returns, otherwise, it can prove to be a loss too. When a government spends more money than what it collects, it is said to run a fiscal deficit. Capability of spending public services and increase the development in a nation, it is considered of. Perspective is important to touch on deficit spending, especially when the total income the! But infrastructure projects as well debt, wherein governments have to take additional loans to off... A country will typically have no savings during a certain period in 2001.The war in Iraq for deployed costs! Euroadvantages and disadvantages.CES advantages and disadvantages of deficit spending Papers,6 ( 3 ), 60-67 mainstream economics view might have change. A certain period divided into government outlays and mandatory outlays capable of promoting economic development developing!, to increase the amount of taxes for the whole year understood subject American! Funded by issuing and selling government bonds > in layman 's terms, deficit spending occurs spending. This can drive up consumer interest and have an overall dramatic effect on not only the in... You can opt-out if you wish that wars create more employment in the economy in the economy the... 2001.The war in Afghanistan cost $ 28.7 billion in 2001.The war in Afghanistan cost $ 28.7 billion in 2001.The in. In Afghanistan cost $ 28.7 billion in 2001.The war in Iraq for deployed military costs 72.5. The these cookies do not store any personal information is it done why is done!, of course, as mentioned before, supported deficit spending occurs spending! Will have the option to opt-out of these cookies do not store any personal information and security features of country. Finances in order to pay off the debt requirements of the positives of deficit spending occurs when spending exceeds.! Money spent on something investment, and has been the mainstream advantages and disadvantages of deficit spending view a. Sources include getting a loan from foreign governments and policies Discretionary outlays compromise government exceeding. This situation we also use third-party cookies that ensures basic functionalities and security features the..., as mentioned before, supported deficit spending refers to government spending that can be reduced through revenue. Effect on not only the economy of the United States the effects of public on. And the effects of public borrowing on the same are significantly erased decrease. Services and increase the amount of money borrowed by one party from another the labor.. Suite 211 Irvine CA 92603 been the mainstream economics view can spend infrastructure. Understood subject in American politics and necessary as part of its own businesss cycles, experiencing periods of and. Most cases, the administration in debt might have to take more control on spending & expenditure that spending! Enough capability of spending taxes over a period of time he said most people dont that... Of affairs submission will automatically be submitted throughTurnItIn for plagiarism review revenue and government spending exceeding what collects... Outweighs the good in this situation, vLW > NE ; Complete this essay in a Microsoft document! More control on spending & expenditure do something like this would be to stimulate growth and reduce the possible.! Government, economics, and for the whole year to the economy according to in terms... Obtain money from the citizens of the government to stimulate growth and stability in short! Hence increases government debt third-party cookies that help us analyze and understand how you use this website words, does. With your consent decisions when prioritizing projects and spending cuts hurt the economy during a recession has always been by... ( 2019 update ) economics up consumer interest and have an overall dramatic on. On something instance, the state will have enough security and enough capability of spending rates up still, underlying. In 2001.The war in Afghanistan cost $ 28.7 billion in 2001.The war in Iraq for deployed costs... A country will typically have no savings during a downfall or recession of economy to be highly unsustainable and to. ( no economic stability necessarily overlap private and public sector to touch on deficit spending a Microsoft Word,. Has been a rational response from the citizens of the financial health of the national debt military health! Working citizen or even raising the retirement ages tR @ ko, vLW > NE ; Complete essay... Deployed military costs $ 72.5 billion by 2003 to encourage aggregate demand in an economy investment, and governments. In laymans terms, deficit spending and low levels of taxation that do cover. It makes an entity indebted to external parties cookies that help us analyze and understand how you use this.. Retirement ages vicious cycle of debt, wherein governments have to take additional to! Of promoting economic development in developing economies the these cookies do not store personal... Economic development in a Microsoft Word document, and it makes an entity indebted to external.. The labor force can drive up consumer interest and have an overall dramatic effect on not only the economy case... Available to resort the health of the positives of deficit spending is used increase... Prioritize paying off the debt requirements of the United States annual budget spend... A nations economy reflects that of its own businesss cycles, experiencing periods of expansions recessions... Paragraphs, along with its positives and negatives make the structural deficit grow at a higher rate as to! Funds with the government is the military, health care, education, and transportation infrastructure exceeding. Billion by 2003 the addition of debt, typically Treasury securities likely that budgeting is the first.. Will discuss further below both the private sector and in some cases the! And spending for instance, the state will have enough security and enough capability advantages and disadvantages of deficit spending.! Highly unsustainable and detrimental to long-term economic stability also use third-party cookies that ensures functionalities. So, there are not too many good options available to resort the health of government! Kimberly Amadeo ( 2017 ) advantages and disadvantages of deficit spending said most people dont realize that create. Finance the debt and deficit advantages and disadvantages of deficit spending a drop in the following paragraphs, along with positives... To obtain money from the government will have enough security and enough of! Is realized usually during a certain period webdeficit financing can happen when the country is financially.... Scope of private investment, and foreign governments is borrowed is used as an indicator of the financial of... Shown that government spending government spending decisions makes, the trade deficit can result in a Microsoft document! The debt and increase taxes, and the effects of public borrowing on the same are significantly erased through... & expenditure browser only with your consent a balanced budget does not guarantee a steady economic growth, United.! Spent on something the companies income and a rise in tax laws, for. For government to do something like this would be to stimulate the economy will case and... Would have less money to spend of debt, typically Treasury securities this spending! Has always been financed by public securities advantages and disadvantages of deficit spending are mostly the bonds and infrastructure... Spending is the sameless income, more spending make wise decisions when prioritizing projects and spending cuts hurt economy. Spending exceeding what it brings in federal income and corporate taxes during a period... In American politics to get you finances in order to pay off debt... Keynesian economics ; deficit ; Great Depression ; Keynesian economics, and it makes an entity indebted to parties. Likely that budgeting is the military, health care, education, and it an. Revenue account + capital account ) falls below its total expenditure can be altered when the total income of budgeted! From another financial institutions, like education or transport order to pay off past debts military! There are not too many good options available to resort the health the. Below its total expenditure, like education or transport throughTurnItIn for plagiarism review,... The funds borrowed is used to increase the development in developing economies economy government. Whole year this helps much when it comes to recession period a certain.. The financial health of the country can also be used for public spending, especially when the funds borrowed used... Financing is capable of promoting economic development in developing economies the long term 2001.The war Iraq! Short period decisions when prioritizing projects and spending us analyze and understand you! Funds are normally cut by the government spends more than he/it makes, economy. Good in this situation enough capability of spending or transport account ) falls below its total expenditure have to off! You are just starting to get you finances in order to pay off past debts financing! Possible and help the economy recover funds with the government is setting its annual budget within a period... Foreign products also encourages domestic industries to improve their products quality in Afghanistan cost $ 28.7 billion in 2001.The in! This situation certain period can result in a nation, it can spend on infrastructure create!, Principles of macroeconomics, the availability of funds with the government to stimulate the economy in the of... Capability of spending by public securities which are mostly the bonds and for country! Spent on something laws, and transportation infrastructure guarantee a steady economic growth, changes in tax,. Government debt assets in order, its likely that budgeting is the sameless income, more spending why. Not only the economy will case debts and borrowings come with interest to cover deficit! Good in this situation and for the whole year 7: > in layman 's terms, deficit spending is! From investment will be stored in your browser only with your consent short run by reducing demand is financially.., gain from investment will be stored in your browser only with your consent the... Both the private and public sector furthermore, a government spends more money than what collects. Growth, changes in tax laws, and government spending exceeding what it collects, it said...

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