1. Deficit, Surplus, National Debt

594 Words2 Pages
bulb-icon

Recommended: elements of the affordable care act

A budget deficit happened when the government spending exceeds government revenue in a certain period. deficit will be equal government spending minus revenue, where spending > revenue.
A budget surplus take place when government spending is less than government revenue in a certain period: surplus is equal revenue minus spending, where revenue > spending.
The National Debt The total accumulation of deficits (minus surpluses) the Federal government has incurred over time. More specifically – the outstanding government bonds (securities). Treasury bonds are a very safe investment, which makes them very popular. The United States owes its citizens and foreign governments about $ 1299 Billion as the 31 may 2011.
The Obama administration has inherited the largest deficits since the Great Depression. Many significant actions have taken place to toughen our economy by creating different programs to help built up what has been broken. The Affordable Care Act in 2010, the Budget Control Act in 2011and the American taxpayer Relief Act in 201 have helped reduce the deficit we swung ourselves. The private sector has a much contribution in the reinforcement and elasticity of the U.S economy. The budget deficit of the fiscal year of 2013 report have showed a decline by $409 billion since the previous year, dropping from $1,1 Trillion to $680 billion. (U.S treasure 2013)
The different causes of public Debt are: wars which force us to sell bonds, recessions when there is a deficit in the finance to decreased revenues , also the lack of fiscal discipline of the congress and all of us.
2. Who owns the National Debt?
According to the bureau of fiscal service, the Federal Government a Account and the Federal Reserve Banks detain approximatel...

... middle of paper ...

...ted and interest payment will increase income inequality. As the taxes, raises in a purpose to pay the interest on the dept will discourage innovation and investment. Foreigner lender will use the money to purchase goods and service from the U.S.
The review the GDP ratio is taking into consideration U.S national debt and the gross domestic product (GDP). Consequently, debts will be paid off if the lower GDP will indicate a strong economy that will prosper by producing and selling goods and services.

Works Cited

summary report of the 2013 financial report of the United States Governement . Bureau of the fiscal service Department of treasure. March 22, 2014 from http://www.factcheck.org/2013/11/who-holds-our-Debt/
Frequently asked question about public debt. Treasure direct . march 22, 2014 from https://www.treasurydirect.gov/govt/resources/faq/faq_publicdebt.htm

Show More
Related

  • IOUSA Summary

    570 Words  | 2 Pages

    This deficit has to do with having responsible leader who are willing to increase awareness and make beneficial changes in the nation. In my opinion, the federal debt is a serious threat to the US that must be politically address whenever possible. I believe that the candidates of the 2016 presidential election should make this issue one of the top priorities to discuss and to dictate a considerable amount of work to fix it. That is because the worse the federal debt is, the worse the future would be to the nation. Also, voters must be well educated about this issue in order to shape their decision in voting for the candidate that seems most powerful and confident about this problem. Solving this problem may be difficult and would take time and so much effort. Therefore, the changes and solution must be on both a national and individual levels as

    Read More

  • The U.S. Free-Enterprise Economy

    788 Words  | 2 Pages

    The dollar will be worth less and less if the nation is in high debt. People will also be affected, when you have less money you spend and buy less due to increased prices, which can cause problems in the economy such as a recession or worse a depression. Budget deficit calls for the government to let costs exceed national income and use monetary policy to jump start the economy. The government must be careful when choosing the best way to build the economy. If the policies fail, they can lead the nation into many problems, as stated above.

    Read More

  • The Australian Federal Government Budget

    2731 Words  | 6 Pages

    The Australian Budget is an annually published document which details the Federal Government's plans to affect the level of economic activity, resource allocation, and income distribution through the use of fiscal policy. It describes the framework which the government intends to follow during the next financial year which will result in the attainment of their objectives. The budget is a publication of the government's plans regarding the use of fiscal policy, and is published to parliament and the general public on “budget night”, so as to allow open dissemination about the status of public finances and to promote transparency in Australia's fiscal policy.

    Read More

  • National Debt Essay

    1380 Words  | 3 Pages

    The national debt surfaced after the revolution when the United States government had to borrow funds from the French government and from the Dutch bankers. By 1790, the U.S. government accumulated millions in debt, but no one knew precisely how much. The Constitution mandated that the new government take over the debts of the old government under the Articles of Confederation.

    Read More

  • The Preamble Of The Federal Budget

    1488 Words  | 3 Pages

    However the interest we pay on our nation 's debt is very small compared to the overall budget. According to the Center on Budget and Policy Priorities only 7% of the total budget is spent on interest which is relatively low compared to things like social security which took up 24% of the budget in 2014 (Policy Basics). As long as the United States can continue to keep the interest rates low the debt will continue to be a begin threat. If the creditors of the U.S. were to spike their interest rates, America would be in trouble, however America has fairly good credit, and it should remain that way unless there is another scare like the government shutdown in 2011 (Riley). Overall the threat of the nation debt is a very minute problem in the grand scheme of things. According to The Richest, only five nations in the entire world are completely debt free, which is astounding when you consider that there are about 195 countries in the entire world (Mathers; How Many). These figures show how extremely difficult it is for a country to run without having a certain amount of debt, and America having debt should not be a concern. America is not even in the top ten countries whose debt make up the majority of their GDP (Country List). Which means that at the moment American’s should not be overly

    Read More

  • The National Debt

    1565 Words  | 4 Pages

    The US has been in and out of debt countless times throughout history, going as far back as the Civil War. However, debt did not become a truly relevant problem until much later, in the 1980s (Budget Deficits). Up to that point, large budget deficits were generally only allowed during wartime, but this pattern ended after the Great Depression. Roosevelt’s New Deal meant that the government spent much more than it previously did, even after the economy improved (Budget De...

    Read More

  • The Purpose of the Federal Reserve System

    2699 Words  | 6 Pages

    Over the past few years we have realized the impact that the Federal Government has on our economy, yet we never knew enough about the subject to understand why. While taking this Economics course it has brought so many things to our attention, especially since we see inflation, gas prices, unemployment and interest rates on the rise. It has given us a better understanding of the effect of the Government on the economy, the stock market, the interest rates, etc. Since the Federal Government has such a control over our Economy, we decided to tackle the subject of the Federal Reserve System and try to get a better understanding of the history, the structure, and the monetary policy of the power that it holds.

    Read More

  • Pros And Cons Of Deficit Spending

    726 Words  | 2 Pages

    Economist John Maynard Keynes is credited with giving deficit spending academic legitimacy when he published “The General Theory” in 1936, even though many of his ideas were rebranded. (Deficit Spending, 2008) The advantages of deficit spending are that is helps

    Read More

  • The U.S Budget Deficit

    1510 Words  | 4 Pages

    The U.S budget deficit over the years has been a problem but lately the deficit has shrunk. However, what made the U.S budget deficit get to where it is today and what will it be like in the years to come. Throughout the past the U.S has operated under a deficit. This means that the U.S Spent more money than it was taking in. The cause of the excess in spending was different depending on which year. Some of the causes were war, increase in spending , and economic downturns. There were different acts passed to try and control the deficit problem. The deficit at the present time is declining. This decline is due to the improving economy, sequester, and a tax increase on high-income households. The big factor that went into the decline in the deficit for 2013 was the payment that Fannie Mae and Freddie Mac made. The deficit decline in the present time may make some think the U.S could get out of debt but it has been projected that the U.S deficit will start to increase once again.

    Read More

  • Federal Debt Research Paper

    232 Words  | 1 Pages

    The Federal Budget Deficit is the amount of money that the government loses each year by spending more than they get back in taxes. The Federal Debt is the accumilation of the federal deficit over the years. Presidents Warren G. Harding and Calvin Coolidge are the onky presidents to ever reduce the federal debt. Today the federal debt is about $21.16 trillion dollars.

    Read More

  • The Pros And Cons Of Extreme Debt

    1097 Words  | 3 Pages

    It has been said that more efforts should be done to prevent and resolve debts. Recent studies by Gary Foreman says, “the government owes over $16 trillion.” The question is, “who does the government owe money to?” According to the Social Security Administration, the government owes $5 trillion to other countries (including the U.S.), $1 trillion to individuals, and $5.7 trillion to the federal. This causes citizens to wonder, “are we being benefitted or neglected?” This leads to the amount of 16.8 trillion dollars of debt. Debt has caused a massive amount of people to suffer; people who have credit cards, people who needs to pay their medical expenses and students who have intentions to take out loans.There are multiple ways

    Read More

  • The Federal Reserve System

    2337 Words  | 5 Pages

    Author Unknown (1994). The Federal Reserve System: Purposes and Functions (5th ed.) Published by Library of Congress

    Read More

  • How Does Credit Card Debt Affect Your Personal Wealth?

    1265 Words  | 3 Pages

    Hall, Ed. “U.S. NATIONAL DEBT CLOCK” Brillig.U.S. Bureau of the Census, 26 July 2010. http://www.brillig.com/debt_clock/

    Read More

  • The Greece Debt Crisis

    3195 Words  | 7 Pages

    Historically, financial crises have been followed by a wave of governments defaulting on their debt obligations. The global economic history has experienced sovereign debt crisis such as in Latin America during the 80s, in Russia at the end of the 90s and in Argentina in the beginning of the 00s. The European debt crisis is the most significant of its kind that the economic world was seen started from 2010. Financial crises tend to lead to, or exacerbate, sharp economic downturns, low government revenues, widening government deficits, and high levels of debt, pushing many governments into default. Greece is currently facing such a sovereign debt crisis and Europe’s most indebted country despite its surplus in the early 2000s. Greece accumulated high levels of debt during the decade before the crisis, when the capital markets were highly liquid. As the crisis has unfolded, and capital markets have become more illiquid, Greece may no longer be able to roll over its maturing debt obligations. Investment by both the private and the public sectors has ground to a halt. Public sector debt has increased substantially as the state had to rely on official assistance to payroll expenses, fiscal deficit and fund social payments.

    Read More

  • Fiscal Policy Essay

    568 Words  | 2 Pages

    Everyone has their own political leaning and that leaning comes from one’s opinion about the Government. Peoples’ opinions are formed by what the parties say they will and will not do, the amounts they want spend and what they want to save. In macroeconomic terms, what the government spends is known as fiscal policy. Fiscal policy is the use of taxation and government spending for the purposes of stimulating or slowing down growth in an economy. Fiscal policy can be used for expansionary reasons, which is aimed at growing the economy and increasing employment, or contractionary which is intended to slow the growth of an economy. Expansionary fiscal policy features increased government spending and decreases in the tax rates as where contractionary policy focuses on lowering government spending and increasing tax rates. It must be understood that fiscal policy is meant to help the economy, although some negative results may arise.

    Read More

More about 1. Deficit, Surplus, National Debt

Open Document