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Politics : American Presidential Politics and foreign affairs
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To: DuckTapeSunroof who wrote (46300)9/29/2010 8:56:39 PM
From: TimF  Read Replies (1) of 71588
 
No the spending necessitates additional borrowing. Its the cause. The revenues can prevent it or not prevent it, but the spending is the actual cause of the borrowing.

Moving away from technical mostly semantic points, to something of more substance, except for the possibility of fiscal crisis, the main negative effect of government borrowing is the same as one of the main negative effect of tax increases. Both "crowd out" private sector expenditure. Its the spending that is the ultimate cause of the cost, and it inevitably creates the cost, no matter what financing option is chosen. (Which is why I bother with the technical distinction in the last paragraph, absent this point it wouldn't be worth it to debate the issue.)
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