In recent times, lifting the so-called "debt ceiling" --- the legal authority of the U.S. Treasury to issue government debt --- has become more politically contentious than in the past. Many government spending programs are funded by deficits, so if Congress were to fail to raise the debt ceiling then those programs would have to be cut back.

Formally, suppose the economy starts at potential output Y* and that there is a permanent decline in government spending G. Furthermore, assume the zero lower bound is never binding in this question.

What is the long-run fiscal multiplier in this case (i.e. the fiscal multiplier comparing the new long-run equilibrium to the initial equilibrium)? Why? (Quick explanation)