7 Things You Need To Know About The National Debt, Deficits, And The Dollar
Government debt can either increase or decrease the wealth of future generations. The debt itself is not a measure of the financial impact across generations. What matters is how the debt affects the strength of the economy when the government borrows the money. In an international economy, there is a second way that a budget deficit can reduce the living standards of future generations. It can cause the country to run a trade deficit, which in turn leads it to borrow money from abroad. As a result, a portion of the U.S. capital stock (shares of stock, government bonds, home mortgages etc.) will be owned by foreigners rather than people in the United States.