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- Why would the private sector purchase government debt?How does the federal government finance a budget deficit? It prints more money. It purchases U.S. Treasury bonds. It cuts spending on entitlement programs. It borrows funds by selling Treasury bonds.Why people buy public debt, even if it does not pay any interest?
- The government needs to pay out 350 billion dollars more in Social Security benefits than it collects and Social Security taxes. What are the options for finding this money?Can the method of loan repayment also have a significant impact on taxes? How?What is a budget deficit? How does a government respond to a budget deficit?