Payment of interest on the U.S. public debt
A) increases the current domestic standard of living in the United States.
B) has no effect on the distribution of income.
C) is thought to decrease income inequality.
D) is thought to increase income inequality.

Question

Quizplus · Accepted Answer

Payment of interest on the U.S. public debt is thought to increase income inequality. This is because the majority of the U.S. public debt is owned by the wealthy and financial institutions, so the interest payments go primarily to them, further increasing their wealth and income. This results in a widening gap between the rich and poor.

Payment of Interest on the U.S. Public Debt