ECO 372 Week 4 DQ 2 - Version 5

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- What are the positive and negative aspects of budget deficits and surpluses? What policy is best for today’s economy? Explain your answer.

A budget surplus can be beneficial because the funds can be used for a variety of things. Extra dollars can be used to pay off past debts, fund various programs, fund federal and state department projects, or refund taxpayers. Paying off the country's debts reduces interest paid as well, thus reducing federal spending. However, the country has not had a budget surplus since 1998, and before that 1969 (Hall, 2013). A budget surplus may indicate too high of taxation though, so it is not necessary the sign of a booming economy.
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