Question #64

Even if the government issues debt voluntarily in association with its deficits, the public debt is still

• inherited by the next generation and reduces their possibilities as a consequence.
• is a benefit to existing investors who voluntarily choose them at the issue prices over holding other assets including low return bank reserves.
• ultimately reduces the capacity of the government to continue spending.

Answer #621

Answer: is a benefit to existing investors who voluntarily choose them at the issue prices over holding other assets including low return bank reserves.

Explanation

Please read Will we really pay higher interest rates? for further material or post a comment if you want further explanation.