What are the Potential Downsides of Economic Stimulus?
While economic stimulus can provide short-term relief, it is not without potential downsides. One concern is the increase in government debt resulting from higher spending and lower tax revenues. Over time, this can lead to higher interest rates and inflation, which can negatively impact the economy. Additionally, if stimulus measures are not well-targeted or efficiently implemented, they may not effectively address the underlying economic issues and could lead to misallocation of resources.