Critics of the Keynesian view argue that increases in government spending financed by borrowing will hamper the recovery from a recession and slow long term growth because
A) more spending and debt will lead to higher future taxes to cover the cost of government and the interest on the debt.
B) government spending is directed by political forces, rather than efficient cost-revenue comparisons.
C) more political spending will lead to more wasteful rent-seeking activities and less production of goods and services that people value.
D) All of the above are true.

Question

Critics of the Keynesian view argue that increases in government spending financed by borrowing will hamper the recovery from a recession and  slow long term growth because
A) more spending and debt will lead to higher future taxes to cover the cost of government and the interest on the debt.
B) government spending is directed by political forces, rather than efficient cost-revenue comparisons.
C) more political spending will lead to more wasteful rent-seeking activities  and less production of goods and services that people value.
D) All of the above are true.

Quizplus · Accepted Answer

Critics of the Keynesian view argue that increases in government spending financed by borrowing will ultimately lead to higher future taxes to cover the cost of government and the interest on the debt, as well as potential political inefficiencies and rent-seeking activities that decrease overall production of goods and services.

Critics of the Keynesian View Argue That Increases in Government