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Essay

Fiscal Policy

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Issue:

Business

 

Written by:

Terry S

 

Date added:

January 11, 2015

 

Level:

University

 

Grade:

A

 

No of pages / words:

7 / 1784

 

Was viewed:

7941 times

 

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Essay content:

According to economists, the debt will increase by 1.6 billion dollars per day! In economical terms, a debt occurs when an individual or group borrows money and is charged interest on that loan. The Federal Government through deficits (spending more than what is collected in taxes) in budget spending created this debt of over seven trillion dollars...
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In the Revised Circular Flow Model in the appendix, we can see that there is a leakage of government spending into interest paid on its debt. The dollar amount in interest that the borrower (the government in this case) must pay to simply maintain the debt is called the debt service. Currently the debt service of the federal treasury is 576 billion dollars annually; approximately 32% of the Government's total receipts (similar to and individual's income)...
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