Which of the following statements about the national debt has the most validity?
A)Our large national debt can bankrupt the nation.
B)If only Americans hold the debt, then payments of interest and principal are simply transfers from some Americans to other Americans.
C)Our large national debt can lead to subjection by the people (especially foreigners) who hold the debt.
D)The national debt represents a burden to future generations who will have to make huge payments of interest and principal.

Question

Quizplus · Accepted Answer

B) is the most valid because it accurately describes the internal dynamics of national debt held by residents of the country. Payments of interest and principal on such debt are indeed transfers within the economy from taxpayers to bondholders, which can include individuals, institutions, and government entities within the same country.

Which of the Following Statements About the National Debt Has