The larger the federal deficit, the more of the federal budget must be devoted simply to paying interest.

Question

Quizplus · Accepted Answer

This is true because when the federal government has a deficit (i.e. spending more than it takes in), it must borrow money by issuing bonds. The interest on these bonds becomes an additional expense for the government and takes up a larger portion of the budget as the deficit grows. This can limit the amount of funds available for other programs and services.

The Larger the Federal Deficit, the More of the Federal