The claims related to the national debt

Share current news articles that support your decisions in the simulation and your claims related to the national debt.

My discussion post is below:

” The approach I took to debt reduction employed several strategies to manage debt. One of the critical strategies included increasing other taxes to increase the revenue generation base. Also, the collections from the income taxes increased, thus providing more revenue to the federal government to manage its debt. Based on the strategies I used, the analysis stabilized debt in the short run and reduced the debt amounts in the long run. The strategy I used was successful in managing debt levels. It is essential to view the impact of national debt on economic growth from a dynamic view for efficient decision-making. According to the article, How Does Public Debt Affect Economic Growth, if utilized efficiently, enables an economy to meet its needs and realize sustainable growth into the future (Rahman et al. 2019). So, debt plays a large role in development. High public debt limits the expansion needs of an economy because a huge chunk of the revenue generated is channeled towards debt payment. Thus, a high public debt presents adverse effects on economic growth in the long run. On the other hand, the outstanding debt to GDP ratio is 60 percent or below because it provides the economy the ability to meet its development targets.

The crowding-out effect is defined as the offset in aggregate demand that results when expansionary fiscal policy raises the interest rate and thereby (Mankiw, 2020). According to the article, Crowding-out (or -in) effect in transition economies, the crowding effect primarily leads to , limiting to a great extent the (, 2018). This analysis suggests that the crowding-out effect negatively impacts the economy because it and heightens the public debt.”

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