Suppose the federal government has no national debt and spends $200 billion, while raising only $60 billion in taxes.

To finance the deficit, the U.S. Treasury must issue_________________________ billion in government bonds.

Next year, assume tax revenues remain at $60 billion, and government spending remains $200 billion plus the interest payment it makes on the government bonds issued to finance the deficit in the first year. If the government pays a 10% rate of interest, the debt-servicing interest payment that needs to be added to the government's $200 billion expenditure for goods and services in the second year is_____________ billion.

Then the deficit in the second year is_________________ billion, the amount of new debt issued is______________ billion, and the new national debt is_________________ billion.