Why should the government balance its budget?
A) because government debt imposes higher taxes or more borrowing on current generations
B) because a balanced budget will smooth the business cycle
C) because moderate budget deficits are unsustainable
D) because recent history shows that the government will not run deficits unless they are justified by war or recession

Question

Quizplus · Accepted Answer

Government debt imposes a burden on current generations through higher taxes or more borrowing in order to pay interest on the debt. Balancing the budget helps to avoid passing on these costs to future generations.

Why Should the Government Balance Its Budget