Are there circumstances in which it might be possible that deficits could increase productivity

Question: #348

Are there circumstances in which it might be possible that deficits could increase productivity and long-run growth?

How does government tax policy affect the decisions of households and firms from a general perspective? From your personal perspective?

Offer your view on how uncertainty about U.S. taxes might lead firms to reduce investment, offering examples.

Solution: #366

Are there circumstances in which it might be possible that deficits could increase productivity

Deficits are an excess of spending over revenues. In the short run they are a problem as they represent ‘ spending beyond means’ but they have been recommended by Keynesians as a remedy to cyclical downturns. The logic is t...