Final answer:
The claim that public choice analysis suggests deficits are inevitable because we always pay full costs of government programs today is false. Deficits arise due to various factors, including political pressures and the influence of organized interest groups, rather than immediate full payments of government program costs.
Step-by-step explanation:
The statement that deficits seem inevitable because we always pay the full costs of government programs today is not entirely accurate and is therefore False. Public choice analysis investigates how government decisions are made, often driven by the interests of smaller, more organized groups, and how these decisions can lead to outcomes like deficits. It's not necessarily because full costs are paid immediately but rather because of the way political incentives and pressures shape policy-making. For example, in The Logic of Collective Action (1965), economist Mancur Olson explains why well-organized groups within a democracy can have a disproportionate influence on government policies, which can result in decisions that may not align with the overall public interest.
Further, deficits can occur due to a variety of factors, such as the government's decision to maintain economic policies related to economic growth, stability, and full employment—aspects that impact annual federal budgets. Also, as debt increases, interest payments rise, which can lead to growing deficits even if other government spending is kept constant. However, the argument does not purport that deficits are always a consequence of wise policy choices; on the contrary, governments may resort to borrowing for impractical reasons, and large deficits can adversely affect the economy by reducing national savings, stifling economic growth, and potentially contributing to financial crises.