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History, 12.06.2020 10:57 zania30

Respond to the following based on your reading. President Reagan’s trickle-down economic policies led to an era of lowering taxes and revenue while continuing to increase spending. This policy resulted in an explosive growth in the national debt which continues to this day. Consider the following chart:

It’s important to look at the federal debt as a percentage of GDP

Figure 3—It’s important to look at the federal debt as a percentage of GDP (represented by the numbers at left).
When thinking about the national debt, it’s important to measure the debt as a percentage of gross domestic product. Gross domestic product (or GDP) is a measurement of the value of all goods and services produced in a nation in a year. It’s helpful to look at the percentage of national debt to GDP for a few reasons:

Comparing percentages takes inflation out of the consideration, allowing for more fair comparisons over long periods of time.

Using percentage debt to GDP gives the reader a sense of the scale of debt and what the amount of debt means for attempts to pay it off.

What might be the costs of having such a large national debt?
Did the promise that tax cuts would result in a growing economy that would pay for any budget shortfalls come true during the Reagan years?

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