pros

• running a budget deficit or high debt is usually high spending or law taxes > expansionary fiscal policy
• • higher AD, higher growth and lower unemployment
  • keynesian economics argue budget deficit in a recession is worthwhile
• • benefits of gov spending include improved education and healthcare, which can shift out LRAS in the future and increase productive capacity
  • by boosting growth and activity in the long-run, it can bring more tax revenue in the future
• incentives of tax cuts, incentivises people to work more and to take higher entrepreneurship, incentivise immigration

  • leads to greater tax returns in future and LRAS shift w immgiration
• Keynesian economists argue that in a recession where expansionary is needed, the risk of crowding out is low as there is already a lot of savings in a recession

  So, the chance of equilibrium interest rates being pushed up by debt-fueled spending is low

  Instead as gov spending leads to economic growth and activity, itll lead to crowding in and getting more private sector due to higher demand

  When theres more demand, theres greater chance for profit