Analysis Of The Federal Budget Deficit And The National Debt

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ANALYSIS OF THE FEDERAL BUDGET DEFICIT AND THE NATIONAL DEBT Morgan Sibley The Federal budget deficit is the amount of spending by the Federal government that is in excess of how much money the government brings in annually. While the Federal budget deficit has steadily decreased overall during the past fifteen years, our Federal debt continues to grow at a drastic rate. A review of how the Federal deficit has evolved over the past fifteen years, the rate of growth of the Federal debt during that same period, and how the two are connected will better explain this phenomenon. The following graphs depict the Federal budget deficit and the Federal debt over the same recent fifteen year period: In 2000, under the second Bush…show more content…
Subsequent packages signed by Obama, such as the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, the Patient Protection and Affordable Care Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, maintained a high Federal Budget deficit in the following years. This was due to the needs of the citizens. During times of recession, unemployment is higher and more people need federal assistance and aid, which must come from the government. Also, fewer people working means less money for the government in tax revenues, so there is less money coming into the government to offset spending. In spite of this, the deficit still began a slow decline. In an effort to counter the effects of some of the Acts mentioned above, in 2011 and 2012 Obama signed into law two acts which have helped to considerably reduce the Federal Budget deficit. The Budget Control Act of 2011 and the American Taxpayer Relief Act of 2012. While the Budget Control Act directly worked to reduce deficit spending while simultaneously increasing the U.S. debt ceiling, the American Taxpayer Relief Act worked to ease the burden of the federal debt on U.S. taxpayers by maintaining the tax cuts that had been previously put into place by
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