A federal budget deficit places a genuine burden on future generations when the

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Quizplus · Accepted Answer

The crowding-out effect occurs when government spending increases, which raises interest rates and reduces private investment. This could lead to less economic growth and lower employment in the future, placing a burden on future generations. If the crowding-out effect is stronger than the crowding-in effect, where government spending stimulates private investment, then the burden on future generations will be greater. Therefore, a federal budget deficit places a genuine burden on future generations when the crowding-out effect is stronger than the crowding-in effect.

A Federal Budget Deficit Places a Genuine Burden on Future