Please respond to all the questions below 1 a What is the cu

Please respond to all the questions below 1. (a) What is the current U.S. federal debt? (To find this, you can go to US Gov\'t Dept of Treasury website.) (b) What is the current U.S. federal federal udget deficit? (Search the internet to find the deficit for last year or an stimate of the deficit for this year. Cite your source.) Explain why our rrent federal debt is so much larger than our current federal deficit. cu 2. How would a government deficit likely affect (a) interest rates and investment? 3. Most state governments are required to balance their budgets. Do you think our federal government should be required to always balance its budget? Briefly explain why or why not. Remember to use economic reasoning!

Solution

20493371220438. 59 is federal debt

666 billion in 2016-17 and likely 440 billion in 2017-18

The source is usgovtspending. Com. The reason is deficit shows shortfall in revenue for only one year. Debt is incurred for financing deficit of decades. So naturally federal debt>federal deficit

Interest rates will rise and investment fall due to crowding out.

No we do not think it is good to require federal govt to balance budget. The reason is it curtails freedom of govt and takes policy tools from its hands. Infact there are very few policy tools like taxation, expenditure etc available With govt. Without such tools govt can\'t fight depression effectively