Eco 372 Fiscal Policy Team Paper

they site that since the 1960's there has only been three!instances (small ones at that) of surpluses in the total government (180). Right now these deficits are not a problem because the rate in the growth of the income is greater than the rate at which the debt increases, but there is no guarentee this will continue so the growth of the debt must be in check now.

The Federal deficit is an annual concept referring to the shortfall between Federal revenues and expenditures in one year’s budget. The Federal debt is the accumulation of borrowing which results from the series of deficits minus any surpluses.

Currently, the United States owes approximately $19 trillion in National Debt. It is owed to Mutual funds, pension funds, foreign governments, foreign investors, American investors and many others. From the year 1959 to 2015, the United States debt has gone up by around 7554% from the debt in 1959 starting at $285 billion. The debt itself has increased by around 9 trillion since Barack Obama has taken the Presidential office in 2009. Everything has been done to increase national debt, but nothing has been made to reduce the national debt.

The federal budget is known as the notorious economic tank from which money is distributed to various programs. The money used every fiscal year, which begins October 1st and ends September 30th the next year, belongs to the people. The government raises this money through taxes and they spend it on national defense, Medicare, and social security. The federal budget is an exercise in making choices, and those options will certainly affect individuals living in the U.S. These choices cause debt to pile up on the government, who is struggling to make it disappear. The deficit and debt of a government gauges how well it is being run and how well it has been run in the past. According to The Economist the national debt is the total

In our textbook, “Principles of Macroeconomics,” the relationship between debt and deficit is described. A deficit is a shortfall in revenue for a particular year’s budget. Whereas, a debt is the total of all accumulated and unpaid deficits. An outlay is an amount of money spent on something. The federal government outlays are divided into government outlays and mandatory outlays. Government outlays are the part of the government budget that includes both spending and transfer payments. Mandatory outlays constitute government spending that is determined by ongoing long term obligations. Of the two, mandatory outlays is the largest portion of the federal budget. Lastly, Discretionary outlays compromise government spending that can be altered when the government is setting its annual budget. A budget surplus occurs when revenue exceeds outlays. A budget deficit occurs when government outlays exceed revenue.

Katherine Beckett. 1997. Making Crime Pay: Law and Order in Contemporary American Politics, Oxford University Press. Published in the Crime and Public Policy Series, edited by Norval Morris and Michael Tonry.

As of September 2014, the United States debt had reached $17.7 trillion dollars (Fighting for a U.S. federal budget that works for all Americans, 2014). Over the past few years, the U.S. debt has continued to increase and signs point to this continuing into 2015. According to the article I have cited, China and Japan hold the vast majority of the United States debt (Fighting for a

When a surplus exists, the government has extra funds to spare and infuse into the economy. This surplus will increase government programs. When the

The U.S. government borrows large sums of money in times of national emergency, such as times of war. The U.S. entered many wars that greatly contributed to the national debt. The government also engaged in multiple social programs that increased the debt, such as the bailouts during the housing crisis in 2008-2009. To keep the economy from collapsing, the government borrowed enormous amounts of money. Half way through this housing crisis the deficit exceeded one trillion dollars. The deficit decreased to under $500 billion after the massive spending cuts deal in 2011.

Segal (2010) points out that America has not had a balanced budget since 2001. In 2008 the US national debt held by foreign holdings was at 48%, while the public debt was at $5,461 billion (Segal, 2010; National priorities org, 2014). The national debt last reported was on October 2013 and had reached 17 trillion dollars, the same amount as the debt ceiling (National priorities Project, 2013).

Neither Republicans nor Democrats appear to have any sense of urgency in rectifying this problem. Fortunately the U.S. Government has a good reputation of paying its debts and thus has a good credit rating which allows it to continue borrowing, although that good standing was put to the test recently in 2011 when Standard& Poor’s reduced the U.S. rating from AAA to AA+.

The United States deficit contributes to its debt and the debt contributes to the deficit. We know the longest running uninterrupted surplus for the Unites States was from 1920 to 1930 but spent most of it combating the war. This will show how the U.S. deficits, debt, and surplus affect the following areas; the taxpayers, future social security and Medicare users, unemployed individuals, University of Phoenix students, The United States financial reputation on an international level, a domestic automobile manufacturer (exporter), and a Italian clothing company (importer).

For most of the United State’s history, the debt has been managed well enough to avoid disaster, after all we’re still using the dollar.

For as long as Americans can remember there has always been a federal deficit. In fact, the only time in American history when there was no federal debt was under president Andrew Jackson, and it only lasted a single year(Wall Street Journal). The federal government never managed to pay off the debt again, although some administrations, like Coolidge’s and Clinton’s, have managed to run brief surpluses(Wall Street Journal). Yet today there seems to be no limit on the debt and deficit spending, and a key question has been pressed into the forefront of politics and fiscal policy, “is

Thomas Jefferson once stated, "I place economy among the first and most important virtues, and public debt as the greatest of dangers. To preserve our independence, we must not let our rulers load us with perpetual debt" (Bussing-Burks, 7). A lot has changed since Jefferson was President two hundred years ago, but the need to be financially solvent is something that will always be necessary for the United States to maintain its leadership position in the world. The United States of America currently owes $16.7 trillion in debt primarily as a result of the government’s spending practices during the last ten years. Two wars, several fiscal collapses, the bursting of the bubble in the housing market, looming medical care costs from an