Final answer:
The statement about the U.S. national debt that is not correct is that the primary burden of the debt is incurred when the deficit-financed activity takes place, as the costs accumulate over time, rather than being fully realized immediately.
Step-by-step explanation:
Considering the provided information on the U.S. national debt and budget deficits, the statement that is not correct is D: "The primary burden of the debt is incurred when the deficit-financed activity takes place." This statement is inaccurate because the primary economic costs of the debt, such as interest payments and potential crowding out of private investment, are not fully realized at the moment the activity is deficit-financed. Instead, these costs accumulate over time and can indeed be passed on to future generations.
Statement A is correct; the national debt can be seen as a liability to future generations who are responsible for paying it back, yet it also represents an asset to those who hold the government's bonds. Statement B is also correct, as the economic costs of servicing the debt through interest payments and potential reduced investment in productive areas are expected to be shouldered by future taxpayers. Statement C is accurate in highlighting the 'crowding out' effect, where government borrowing for debt service might reduce the availability of funds for private investment, potentially affecting future economic growth.