An increase in the public debt and its subsequent repayment will tend to:

Question

Quizplus · Accepted Answer

When a government increases public debt, it typically has to repay the debt with interest in the future. This repayment is typically funded through taxes on individuals and businesses, which tend to increase income inequality as higher income individuals are likely to pay a larger share of taxes. Therefore, an increase in public debt and its subsequent repayment tend to mildly increase income inequality in the U.S.

An Increase in the Public Debt and Its Subsequent Repayment