America is no longer the land ‘gleaming with streets paved with gold.’ It seems that one of the main reasons that the country is doing poorly is the huge debt that we have procured. As of November 21, 2011, the U.S. owed $15,053,314,782,410.75; or, in words, fifteen trillion, fifty three billion, three hundred fourteen million, seven hundred eighty two thousand, four hundred ten dollars and seventy five cents to various investors (brillig.com). If that number is not frightening enough, brillig.com also reported that since September 2007 the debt has increased by almost four billion dollars daily (brillig.com). The last time that the U.S. had a balanced budget was in 1998 under Bill Clinton; before that, there was a budget deficit every year between 1970 and 1997 (cnn.com). For twenty eight years, the government added to their debt.
Countries around the world are facing a dramatic recession, which is forcing them to spend capital they do not have. There are few sovereign states immune to the financial deficit that seems to even plague world super powers, such as The United States. This is unnerving due to the power and influence that the United States holds on the world stage. No matter how frugal the future budget may be and regardless of future financial success how will the United States overcome a deficit of 14.7 trillion dollars? Regarding this harsh reality there are two factions, one which believes the deficit is a necessary evil.
n.d. The Transmission Mechanism of Monetary Policy. London: BE. Bank of England. http://www.bankofengland.co.uk/ (assessed May 17, 2011).
The National Commission on Fiscal Responsibility and Reform. Dec. 2010. Web. 1 June 2011. . United States Government Accountability Office.
Rising Global Debt In the 2014 Global Risks Report issued by the World Economic Forum, fiscal crises in key economies was ranked the number global risk of highest concern (Global Risks). Ever since the great financial crisis from 2007-2009, countries around the globe have experienced a large growth of indebtedness due to the continuing need for countries to borrow from surplus economies in order to supplement persistent account deficits. Particularly in the United States, foreign owners of government debt saw an increase in their holdings from $756 billion in 1999 to $3.3 trillion in 2008 (Oatley p.235). Such an increase in global debt is a definite cause for concern as there are indications that the amount of existing debt increases/decreases growth rates in a country’s economy (Reinhart and Rogoff 2010 pg. 2).
3. Describe how the Net Present... ... middle of paper ... ...al-Manager. Clougherty, T. (2011). Interest Rates and the Price System. Retrieved on July 8, 2011 from http://www.adamsmith.org/blog/tax-and-economy/interest-rates-and-the-price-system/.
U.S. Department of Education. United States Government. Web. 27 Nov. 2011. "Fiscal Year 2012 Budget Summary and Background Information."
A Committee for Responsible Federal Budget Project, 2012. U.S. Department of Energy. Oil and Petroleum Products Explaned. 5 July 2011. 22 Februrary 2012 .
Retrieved from http://jamesrmoody.com/fileshare/January 24 State Auditor submission.pdf Rubin, I. (2010). The politics of public budgeting. (6th ed., p. 50). Washington, DC: CQ Press.