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Politics : Formerly About Advanced Micro Devices
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To: Road Walker who wrote (333793)4/18/2007 7:45:25 PM
From: TimF  Read Replies (2) of 1574489
 
And at a point the resultant deficit, and it's effect on interest rates, slows the economy.

Spending is indeed the biggest issue.

Government spending pulls money away from private investment, whether its paid for by taxes, borrowing, printing/inflation, or command and control central command. The last destroys the economy. Hyper-inflation can do a pretty good job on it as well. Taxes and borrowing both take money from the economy less destructively then either of the other two methods. In addition to taking money out of the private sector, taxation also distorts the incentives for the private sector. OTOH borrowing too much is unsustainable, and leads to future taxation and/or inflation.
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