The political tendency to favor spending priorities with immediate benefits but deferred costs results in

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The tendency to favor spending priorities with immediate benefits but deferred costs leads to chronic budget deficits, misdirection of stabilization policy, and unfunded liabilities. Chronic budget deficits occur due to the imbalance between spending and revenue over the long term, which is worsened by the political preference for immediate benefits. Since stabilization policy involves government actions intended to promote economic stability, misdirection of such policy occurs when immediate benefits are prioritized over the long-term effects. Finally, the preference for immediate benefits over deferred costs leads to unfunded liabilities, which are promises made by the government for future payments without corresponding revenue streams.

The Political Tendency to Favor Spending Priorities with Immediate Benefits