Should We Worry About the Size of Fiscal Deficit?

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At the time of this writing, the US is currently running a deficit of over $1.3 trillion. As the fiscal deficit grows, so does the government borrowings which need to be repaid along with the interest expense. The fiscal deficit is usually observed as a percentage of the country's GDP. The US fiscal deficit is ~8.5% of the GDP, which seems pretty high compared to ~3.2% in 2008. For some people this is a big cause of concern, while for others the concern is overrated.

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