I’m a middle aged dude with a family, own a house, have four kids, investments, all the adulting things.
However, I’m still not sure how a multi-trillion dollar national defecit seeps down to affect my day-to-day life
In: 492
First a small clarification – deficit is the annual difference between expenditure and income (if income is greater you have a surplus not a deficit). Deficit gets added to/surplus subtracted from the national debt.
The main effect it will have is that as the debt rises, more of the country’s revenue is needed to pay interest on it, reducing the amount available for spending elsewhere. Countries could prioritise debt repayment to decrease it, but the money has to come from somewhere and a lot of people would rather see it spent year-on-year on health, education etc. than what seems an abstract concept of “paying off debt” when they don’t see the impact or benefit as being significant to them, compared to increased spending elsewhere (or tax cuts).
Latest Answers