The Economic Effects Of Budgetary Deficit And The Budgets

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Register to read the introduction… This is a horrendous, if not cruel, imposition upon the taxpayers who are being singled out by government to bear the burden of increasing the coffers of government to remedy a deficit situation that was not caused by the taxpayers, but by governmental policies, directions and oversights themselves. It becomes no less a tragedy as government, which is suppose to serve the people, instead overburdens the taxpayer with more taxes as they are made to undergo a harrowing experience upon their pockets for government’s inefficiency in managing the fiscal, monetary and economic affairs of the nation.

http://www.newsflash.org/2004/02/ht/ht004617.htm Economic Effects of a Budget Deficit * Increased borrowing
The govt will have to borrow from the private sector, it does this by asking the Central Bank to sell bonds and gilts to the private sector. * Higher debt interest payments
Selling bonds will increase the national debt. The annual interest payment is high, this has a high opportunity cost because it requires future generations to pay higher taxes. * Increased AD
A budget deficit implies lower taxes and increased G, this will increase AD and this may cause higher Real GDP and

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