TOPICS
Other FP
Issues
- Policy in the Great
Depression
- New Keynesian and New Classical FP (does FP
work?)
- Government Budget Deficits and Trade
The Federal Deficits and
Debt
- Facts
- False Concerns
- Substantive Issues
OUTCOMES
Discuss the causes and
government reaction to the Great Depression.
Explain the differences between
the New Keynesian view of fiscal policy and the New
Classical view
How does a budget deficit affect
the trade deficit?.
Differentiate between the deficit
and the debt.
State the relative size of the
debt as a percentage of GDP and describe how that has
changed in recent years.
Describe the annual interest
charges on the debt, who holds the debt, and the impact
of inflation on the debt.
Explain why the debt can also be
considered public credit.
Identify and discuss two widely
held "False Concerns" about the public debt.
Explain the "Substantive Issues"
of the pubilic debt including: income distribution,
economic incentives, the foreign owned debt, crowding
out, and public investments.
What effects might the Social
Security and Medicare programs have on the public
debt?
The Glass-Steagall Act
has been repealed, income inequality is increasing, and
the stock market is near an all-time high. Are we in
danger of another great depression?
Vice President Walter
Mondale in 1984 was running for president against
President Ronald Reagan. During a debate he was asked
what he would do about the large trade deficit of the
time. His answer was that to reduce the trade deficit we
need to reduce the budget deficit and he would raise
taxes to do that. He was not elected president, but
explain his argument.
Will the public debt
bankrupt the United States' government?
What effect would a
constitutional amendment requiring the federal government
balance its budget have on the effectiveness of fiscal
policy? Hint:
procyclical
|