Choose one question and give me a paragraph answer.
A：Why do private (companies and corporations) and public institutions (cities, states and governments) use debt to raise capital for their operations? Why are tax revenues not enough to for the public sector? Why are revenues not enough for the private sector? Do you think there is an advantage to use debt for both private and public entities?
B：If the US government does not vote to increase the debt ceiling the Federal Reserve can overstep and create entities that will buy Treasuries from the government and give the government cash. The Federal Reserve is essentially printing money to give the Federal government through printing money and buying Treasuries, eventually the money has to be repaid to the shell entities and the Federal reserve though. Reflect on the problems/benefits you think this will have for our economy.
I do not need reference. You just write down your thinking.
Answer preview
A sound tax system must balance equity, efficiency, and simplicity to raise enough revenue for appropriate local government financing while promoting a high level of private sector investment. Also, with the increase in globalization and capital mobility, a sound tax system must remain competitive with neighboring countries while reinforcing systems that consider the private sectors. The private sectors get tax funds from the public sector. However, when there is not enough tax revenue, the growth and efficiency of the private sector will become a challenge. For a private sector to grow and be productive, there must be enough money in circulation to facilitate its operations in competing with other private sectors, manage employees and use for its growth.
