Lawmaker: Raising taxes is not the only means of reducing government debt. The government's stockpile of helium is worth 25...
GMAT Critical Reasoning : (CR) Questions
Lawmaker: Raising taxes is not the only means of reducing government debt. The government's stockpile of helium is worth 25 percent more, at current market prices, than the debt accumulated in acquiring and storing it. Therefore, by selling the helium, the government can not only pay off that debt but reduce its overall debt as well.
Which of the following is an assumption on which the argument depends?
Passage Analysis:
| Text from Passage | Analysis |
| Raising taxes is not the only means of reducing government debt. |
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| The government's stockpile of helium is worth \(25\%\) more, at current market prices, than the debt accumulated in acquiring and storing it. |
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| Therefore, by selling the helium, the government can not only pay off that debt but reduce its overall debt as well. |
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Argument Flow:
The lawmaker starts by claiming there are alternatives to raising taxes for reducing debt, then provides a specific example with government helium that's worth more than what was spent on it, and concludes this sale would both pay off the helium debt and help with overall debt reduction.
Main Conclusion:
By selling its helium stockpile, the government can pay off the debt from acquiring that helium and also reduce its overall debt.
Logical Structure:
The argument relies on simple math: if the helium is worth \(25\%\) more than the debt accumulated in getting it, then selling it should cover that specific debt plus provide extra money to reduce other government debts. The logic assumes the sale will actually happen at current market prices and that no other costs or factors will interfere.
Prethinking:
Question type:
Assumption - We need to find what the argument must assume to be true for the conclusion to work. We're looking for gaps between the premises and conclusion that need to be filled.
Precision of Claims
The argument makes specific quantitative claims (helium worth \(25\%\) more than debt) and activity claims (selling helium will reduce overall debt). We need to focus on what must be true for this selling process to actually work as described.
Strategy
To find assumptions, we need to think about ways the conclusion could fail even if the premises are true. The argument says selling helium will pay off helium debt AND reduce overall debt. What could go wrong with this plan? We need to identify unstated conditions that MUST be true for this to work.
The government has no current need for helium. This isn't necessary for the argument to work. The lawmaker's conclusion is specifically about debt reduction through selling helium - whether the government needs helium for other purposes doesn't affect whether selling it would reduce debt. The argument could still be valid even if the government needs helium, as long as debt reduction is the priority being discussed.
Twenty-five percent of the debt the government has accumulated in stockpiling helium is not an insignificant portion of the government's total debt. The argument doesn't need this assumption. Even if the \(25\%\) represents a tiny fraction of total debt, the conclusion that selling helium will 'reduce overall debt' would still be technically true - any reduction, however small, still qualifies as reduction.
It is not in the lawmaker's interest to advocate raising taxes as a means of reducing government debt. This relates to the lawmaker's motivations, but the logical validity of the helium-selling argument doesn't depend on the lawmaker's personal interests regarding tax policy. The mathematical relationship between helium value and debt remains the same regardless of political motivations.
Attempts to sell the government's helium will not depress the market price of helium by more than \(25\) percent. This is essential for the argument to work. The conclusion relies on helium being worth \(25\%\) more than the acquisition debt. If selling the government's large stockpile crashes the market price by more than \(25\%\), the sale proceeds could fall below the original debt amount, making it impossible to both pay off that debt AND reduce overall debt as claimed. The argument must assume the selling action won't destroy its own price foundation.
The government will not incur any costs in closing its facilities for stockpiling helium. While closing costs could affect the net benefit, this assumption isn't necessary for the core argument. The lawmaker's conclusion is specifically about the sale of helium covering debt - even if there are facility closure costs, the sale could still generate enough to pay helium-related debt and provide some overall debt reduction, just with a smaller net benefit than calculated.