Friday, June 18, 2010

Are You Smarter than a 7th Grader?

Are you smarter than a 7th grader? Here is a letter from a 7th grader to the CBO, the federal budget oversight office:

How will budget deficits affect people under the age of 18?

When the federal government borrows large amounts of money, it pushes interest rates higher, and people and businesses generally need to pay more to borrow money for themselves. As a result, they invest less in factories, office buildings, and equipment, and people in the future--including your generation--will have less income than they otherwise would. Also, the government needs to pay interest on the money it borrows, which means there will be less money available for other things that the government will spend money on in the future.

Kudos to the CBO for publishing the letter.

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