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Expenses in industrially developed countries goes for needs of redistribution,
Grants and other purposes, outright favourable to group interests. Such
In the image, budgetary deficiency almost inevitably reduces a capital stock
(Tools, cars, constructions), remaining in the inheritance future
To generations. As a result labour productivity, and, hence,
Level of its payment will appear more low? Than in absence of deficiency.
Irrespective of, whether the state services to the population are financed for
The bill of a debt or at the expense of the taxes, resources used for them become
Are inaccessible to manufacture of other things. A system, for example, a motorway,
The government distracts resources from a private sector where they could
To be used any otherwise. As a result the flow output of the goods
For private consumption it appears more low. These are today's costs
The State expenditure, and financing by means of the state
Debt is not capable to remove them in the future.
Whether deficiency can lead to economic crash? The credit - a usual way
Business dealing. Many large and profitable corporations constantly have
Outstanding debt. A key to understanding of expediency of the credit as in
The relation of separate persons and private concerns, and the states, is
Parity between the expected income and obligations on payment of percent.
While the firm profit is great in comparison with its obligations on payment
Percent, the debt does not create special problems. The same concerns and
The federal government. While citizens have a confidence that
The state can collect the means necessary for by means of taxes
Service of promissory notes, the government will not have problems with
Financing and refinancing of the outstanding debt.
Expenses on public debt service can grow, however, very much
Quickly and to lead to an exhaustion of tax resources. For today,
For example, expenses on payment of percent on a public debt absorb
31 cent from each dollar collected by the federal government of Canada
At the expense of taxes. At the big public debt tax bearers can
Not to want and to pay further heavy taxes, the lesser and smaller part
Which will go on granting to tax bearers
The state services.
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