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Macro 20

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Gale Pooley
Gale Pooley

Macro 20

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Lecture 20 Macroeconomics
Chapter 18 The Government Budget Taxes and Spending
kahoot.com
Types Per Head Flat Regressive Progressive
Progressive The more you earn, the higher the rate
Types Income Sales VAT Property
De๏ฌcits and Debt Government Spending and Revenue
De๏ฌcit Spending greater than revenue
Balanced Budget Spending exactly equals revenues
Surplus Revenue greater than spending
Debt Accumulated deficits
Debt $21.7 trillion $65,956 per person
Why would you want government to go into debt? Donโ€™t have to pay Future larger economy
Debt Investment Only if the return is higher than the interest rate
How to reduce de๏ฌcits Higher taxes Lower spending
Entitlements Guaranteed benefits 1960 - 20% 2017 - 60%
Interest Expense $240 billion 2.0% current rate 6.2% historical 1962-2017
Solution to Debt Economic Growth
Spending Taxes Aggregate Demand Expand Increase Decrease Right Contract Decrease Increase Left Fiscal Policies

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