ECON 241 Lecture 3: 241(4)
20 Dec 2017
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Sep 26th: deficit means spending more in fiscal goal. Intertemporal shift of responsibility to pay for excess spending. Federal debt---$ 650 billion not include unformed liabilities of cpp. Three events: world war i deficit was 10%, gnp--deficit was 40%, gnp, depression deficit was 7%, gnp deficit was 50% gnp, ww ii deficit was 20% gnp deficit was 100% gnp. All involved specific event that required large deficits and accumulation of debt, but in all cases deficit and debt levels returned to (cid:862)(cid:374)or(cid:373)al(cid:863) with 5-8 years. History: post wwii through early 1970s, balanced budgets, surpluses, low unemployment, strong growth, goal revenue increase rapidly without tax increase, end of period saw creation of many current programs ut reform, Early 1970s through mid 1990s: oil shock leads to period of slow growth stagflation( ), higher unemployment, one issue many of pgms involve non-discretionary( ) spending, begins 25 years of deficits, accumulating debt and times very high service charges.
