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In his 2009 budget proposal for the U.S., President Obama wrote, "Unfortunately, we are also inheriting the worst economic crisis since the Great Depression which will force us to increase deficit spending temporarily as we try to jump start economic growth." Under what conditions is it sensible to use a deficit to finance government spending?
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The economy, however, is facing inflationary pressures. To deal with the macroeconomic problem, the government uses expansionary fiscal policy to decrease taxes and, as an indirect
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