Deficit and Debt Projections

There are two ways to influence the economy—through fiscal policy (using government spending or taxation to impact the economy) or through monetary policy (adjusting money supply and interest rates to impact the economy). Some policy makers favor the deliberate actions of fiscal policies, others prefer the flexibility of monetary actions, while many advocate a powerful combination of the tools. All concur that unlike monetary policy, fiscal stimulus actions spur deficits. So let’s take a quick look at how fiscal and monetary policy tools work. Then you can decide if the benefits of fiscal policies are worth such ...

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