Fiscal policies are used by the government to stabilize the economy. During the 2020 emergency caused by the coronavirus pandemic, the U.S. government approved a stimulus package that increased the U.S. debt.

For this discussion, first play the simulation  (from the Committee for a Responsible Federal Budget), in which you make fiscal policy decisions in an attempt to reduce the U.S. debt. You can play the simulation as many times as you like.

In your initial post, include an image of your simulation report. (See .) Then address the following:

  • Share your experience in the simulation. What strategies did you pursue? Were you successful in reducing the debt?
  • In your opinion, is a high national debt a problem for future economic growth? What is the ideal debt-to-GDP ratio? Research academic sources or refer to the information available through the simulation to support your opinion.
  • Government spending increases national debt and can cause a crowding-out effect. Explain what the crowding-out effect is and why it’s considered a negative effect of increased government spending. Use information from the textbook to support your analysis.

In your responses, comment on at least two posts from your peers by comparing and contrasting your experiences and opinions. Share current news articles or references from the textbook that support your decisions in the simulation and your claims related to the national debt.

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