The primary causes of drastic increases in government spending, revenue, and debt over time include various factors.
What were the factors?
Major events like wars (e.g., World War I, World War II, Vietnam War) led to increased government spending for defense and wartime efforts, causing spikes in debt.
Economic downturns (e.g., Great Depression) prompted increased spending on social programs, unemployment benefits, and infrastructure projects, impacting debt.
Additionally, policy changes, such as tax cuts or increased entitlement spending, influenced revenue and debt levels.
These significant events and policy decisions can potentially contribute to inflation due to increased government borrowing, leading to higher demand for goods and services without a corresponding increase in supply, driving up prices across the economy
The Complete Question
Study this chart that shows the increases in Government spending, revenue, and debt from 1790 to 2015 and identify the primary causes of these drastic increases. Explain how these significant events in history can cause inflation within the economy.
Year Government Spending Government Revenue Government Debt
1790 $50 million $20 million $75 million
... ... ... ...
2015 $3.8 trillion $3.2 trillion $18.2 trillion