Deficit and Economy

Today, economists generally agree that high budget deficits reduce the ability of the economy to grow in the future. So, the general question is, why do high budget deficits matter? In order to understand this, we need to understand the concepts of economic growth and decline. What is economic growth: "Economic growth occurs primarily with the increase in value of goods and services produced by an economy" (Case et. al, 2009) while growth measurement" happens through the computation of the percentage increase in inflation adjusted, real growth in Gross Domestic Product" (Case et. al, 2009). Furthermore, the GDP is "the total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports" (Case et. al, 2009). Therefore, we can define an economic slowdown in...
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