Does public debt impose a burden? Explain.
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Does public debt impose a burden? Explain.
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The amount or money that a central government owes is referred to as government debt or public debt. This amount may represent government borrowings from banks, public financial institutions, and other external and internal sources. Yes, public debt does impose a burden on the economy as a whole, as illustrated by the following points.

i. Negative impact on productivity and investment: To pay the debt, a government may levy taxes or print money. This, however, reduces people's ability to work, save, and invest, hampereding a country's development. 

ii. Burden on future generations: The government shifts the burden of lower consumption to future generations. Higher current government borrowings result in higher future taxes levied to repay past obligations. The government taxes the younger generations, reducing their consumption, savings, and investments. As a result, increased public debt has a negative impact on the welfare of future generations.

iii. Lowers the private investment: By boosting interest rates on bonds and securities, the government promotes greater investment. As a result, the government obtains a disproportionate share of the savings of residents, crowding out private investments. 

iv. Causes a drain on national wealth: The wealth of the country is depleted as a result of repaying loans obtained from foreign countries and institutions.

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