The U.S Government must pay a higher rate of interest on the bonds it sells.
If federal revenues and government spending are equal – as in, the government takes in exactly as much as it spends – then the federal government has what’s called a balanced budget. If revenues are greater than spending, the result is a budget surplus. And if government spending is greater than the revenue it brings in, the result is a budget deficit, which means the federal government must borrow money to cover its expenses.
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