If unnecessary government borrowing (deficit spending) and high tariffs are both harmful to the economy, why do governments in democracies often adopt such economic policies?

Question

Mauricio

Social Studies

12 May, 16:53

If unnecessary government borrowing (deficit spending) and high tariffs are both harmful to the economy, why do governments in democracies often adopt such economic policies?

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Answers (1)

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Kobe Khan · Answer 1

Government borrowing and high tariffs are a source of income for the government, and sometimes the government needs money right now rather than in the future (which is what would happen if the economy got stronger: more money in the future.

For example, if the government wants to pay for medical expenses of some part of the population, they will need the money immediately and thus will need to borrow it.