Word: borrowingã
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Dates: during 2005-2005
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Furthermore, it is misleading to cite the short-term increase in government borrowing??the “transition costs”—as a downside to PRAs. Government borrowing hurts the economy because it saps funds from the supply of national savings and thus raises real interest rates, which crowds out private investment. But every dollar the government borrows is transferred into PRAs, which increases the supply of savings by an equal amount. The net effect on national savings is zero...
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