Aug 14, 2011

How Should Governments Deal With Debt?

Nations that spend themselves into debt face very difficult choices. As Dr. Stephen Davies sees it, a country in debt has three potential options to fix their debt problem. The first option is some combination of raising taxes and cutting spending. The second is to repudiate on the debt. The third option is inflation. Among these options, Dr. Stephen Davies finds that cuts in government spending are the most effective solution in the long.

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