The Price We Pay for Deficits

May 2018 //
Economics

If federal budget deficits are not gradually reduced, there are two main risks: First, with interest owed on the national debt (as a percent of the federal budget) growing, spending on other important categories (like defense, Medicare, infrastructure, etc.) would necessarily need to account for less of the federal budget. Second, a sufficiently high national debt that becomes “monetized” (paid for by essentially printing money) would be inflationary