For each of the following, indicate which type of government spending would justify a budget deficit and which would not. a. Increased federal spending on Medicare b. Increased spending on education c. Increased spending on the space program d. Increased spending on airports and air traffic control

Short Answer

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In conclusion, increased spending on Medicare, education, and airports and air traffic control systems can be justified for causing a budget deficit due to their long-term benefits to the country's overall welfare and economy. However, increased spending on the space program may not be justifiable in this context, given the less immediate and uncertain results from such investments.

Step by step solution

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a. Increased federal spending on Medicare

Medicare is a government-funded program that provides health care coverage for older adults and certain disabled individuals. Increased spending on Medicare could lead to better health care services and overall health outcomes for this vulnerable population. This, in turn, could reduce the country's health care costs in the long run, as healthier citizens generally require fewer medical interventions. Considering the long-term benefits to public health and the potential to reduce healthcare costs, increasing federal spending on Medicare can be seen as justifiable in the context of a budget deficit.
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b. Increased spending on education

Education plays a critical role in shaping a nation's future workforce, economy, and socio-cultural landscape. Increased spending on education can lead to better schools, infrastructure, resources, and teaching staff, which in turn can improve the quality of education for students across the country. This increased investment in education has the potential to boost the nation's economy by producing a more skilled and competent workforce. Given the long-term economic and social benefits of investing in education, increased spending in this area could justify a budget deficit.
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c. Increased spending on the space program

The space program provides scientific research, technological advancements, and contributes to national prestige. While increased spending could lead to groundbreaking discoveries, benefits from the space program are generally less immediate and tangible than those resulting from increased spending on services like education and healthcare. Additionally, the space program faces several uncertainties and risks when it comes to obtaining concrete results from investments. Considering the less immediate and uncertain benefits of increased spending in the space program, it might not be justifiable to allocate a significant budget deficit for this purpose.
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d. Increased spending on airports and air traffic control

Airports and air traffic control systems are essential components of a nation's transportation infrastructure. Increased spending on these facilities can result in improved safety, efficiency, and capacity of air travel. In turn, this can enhance trade, tourism, and connectivity within the country and internationally, ultimately boosting the nation's economy. Given the positive ripple effects that improved airports and air traffic control could have on the national economy, increased spending on these infrastructures could justify a budget deficit. In conclusion, increased spending on Medicare, education, and airports and air traffic control systems can be justified for causing a budget deficit due to their long-term benefits to the country's overall welfare and economy. However, increased spending on the space program may not be justifiable in this context, given the less immediate and uncertain results from such investments.

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