If debt-financed less productive government spending crowds out more productive private investment,future generations will bear
A)All of the burden of the debt due to higher taxes.
B)Zero burden as a result of the debt.
C)Some of the burden of the debt due to lower productive capacity.
D)A portion of the burden of the debt relative to the population size.

Question

Quizplus · Accepted Answer

Less productive government spending crowds out more productive private investment, which leads to lower productive capacity and slower economic growth. Lower productive capacity leads to lower future tax revenues and higher public debt burdens. Therefore, future generations will bear some of the burden of the debt due to lower productive capacity.

If Debt-Financed Less Productive Government Spending Crowds Out More Productive