Government Spending and Its Effect on Households

Discussion 1: “Government Spending and Its Effect on Households.” Please respond to the following:

  • Economic growth depends in part on the ability of business entities and households to borrow money. Is government borrowing necessary to achieve the same purpose? Is deficit spending financed by debt always undesirable? Why or why not?
  • Based on your research and findings from the second e-Activity, answer the following question: If the government cuts taxes and funds the deficit with debt, household consumption does not change and disposable income rises. If this is a desirable result of tax cuts and deficit spending, is it a good idea for the government to regularly pursue this type of fiscal policy? Why or why not?

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