Some economists argue that the federal government should normally run a deficit at potential gdp, with the borrowed funds applied to

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9 September, 21:44

Some economists argue that the federal government should normally run a deficit at potential gdp, with the borrowed funds applied to

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Derick Guerra · Answer 1

The borrowed funds should be applied to investment goods. This is similar to how, when a company receives funds through lowered taxes and other benefits, they are expected to invest those funds in capital goods such as machines and other equipment that would be used to produce other, useful goods.