Federal Debt and Deficit: the Solutions

When World War II ended in 1949, the debt grew at a slow and steady pace for the next 20 years. When the Vietnam War began in the 1960's the debt accelerated sharply. Thanks to the growth of television and news media, growth of the deficit was widely publicized. For the first time, the American people were given access to what was going on with the nation's debt. When the Gulf War began the early 1990's, the national debt reached a trillion dollars for the first time. By the end of the Gulf War, the government decided to make amendments to fix the continuing problem with the deficit. Despite those promises to reduce spending, the debt is currently at it highest point ever.

Federal debt has been increasing for at least the past ten years. Currently, federal debt is $19,929,184,161,352.13 (Chantrill). The national debt has nearly doubled throughout Obama’s presidency and President elect Trump’s ideas do not look promising for change. It is estimated that Trump’s tax cuts will raise federal debt by $7.2 trillion within the next decade (Mauro). Many debt crises have occurred because of declines in growth. When

Any person struggling through difficult times will seek out other means of financial support including borrowing money that may be harder to pay back in the future. The United States will often follow a similar path and spend more money than it earns. Deficit spending in the United States comes with some advantages, disadvantages, and strong criticism. Some feel deficit spending is good for getting the economy back in motion while others contend it does nothing for the economy. The effects of deficit spending are carefully examined to determine if the United States is improving or degrading the future of the economy.

In 2009 the debt was amounted to about $12 trillion , or 83.4 percent of the country’s GDP (“Budget of the United States Government: Historical Tables Fiscal Year 2011” table 7.1). Since 2003, the debt has been increasing by more than $500 billion annually. The increase in 2009 was $1.9 trillion. According to the Congressional Budgeting Office, this debt will keep increasing at least for the next decade (“The Budget and Economic Outlook : Fiscal Years 2010 to 2020” 21).

Since its inception, the United States of America has had fluctuating amounts of debt. High points usually follow in the wake of war or recessions, and low points usually occur in times of relative stability in the U.S. Recently, however, the United States has amassed over 18 trillion dollars in debt. The national debt has been rising steadily since the 1970’s and experienced a large growth around the year 2009. From the years 1929 to 2009, the Debt to GDP ratio was approximately 48 percent on average (excluding the years within the World War II era), while from 2009-2014 the Debt to GDP ratio was approximately 97 percent. This increase was most likely the result of increased defense/war spending, the Obama’s American Recovery and Reinvestment Act, and the Troubled Asset Relief Program. All of these events

The federal budget deficit it is an excess government spending on state revenues. And public debt is an aggregate amount of government debt, which is composed of outstanding loans and unpaid interest thereon. U.S. federal expenditures is approximately around 3.5-4 trillion dollars, which includes: defense – $700b, social security – $700b, Medicare and Medicaid – $450b, Interest – $200b, other assistance such as food stamps, unemployment, housing, EITC - $180b, and other non-defense - $600b.

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. The other believing that a deficit so large can be nothing but malignant to the contentment of the American common welfare. The

To provide evidence to the current U.S. government budget deficit and government external debt situation we should take a closer look at the government budget deficit, national and personal debt in the country. First, I am going to start with a definition of U.S government deficit: It is essentially the difference between what the U.S government spends in any fiscal year and the revenues it takes in. Any time the spending exceeds the revenues, the federal government runs a deficit. As many may already know the United States must increase its revenue or reduce expenses during the next decade in order to farther debt and loss of creditability in the world financial markets. There are several ways to balance the U.S government without giving up the nation’s increase of collective productivity and growing economy. Government can reduce expenditures by finding more cost

In an election year, the average citizen is apt to hear a great deal of talk about income, taxes, spending, and more importantly budget deficits and the national debt. Given all of the talk, one may come to think that budget deficits and the national debt are one in the same. While the two do go hand-in-hand, it is important to understand that they are two separate things.

Despite America being in trillions of dollars’ worth of debt the government continues to borrow more money and surprisingly functions. Foreign countries continue to lend the United States money because the economy of other nations would plummet. Other countries are just as dependent on the American economy flourishing as Americans are. With regards to this, the public debt and deficit will be increased if a nation goes over budget. The deficit is the amount of money the nation has spent versus the amount of money a nation has earned. Public debt is how much the government has borrowed from other countries and has not payed back. Both the national debt and the deficit affect each other. Generally, government debt increases from spending and decreases from taxes. However, government debt fluctuates throughout the course of a year. For example, if a nation spends more than budgeted they will increase the debt. In a like manner, if a nation goes under the national debt they will reduce the

The United States of America is currently being stared down by twenty trillion dollars in debt. This debt is not to be blamed one political party, but rather the entire American population since the beginning of our country’s existence. We have been spending our money as if we are a large country, but taxing our people like we are a small country. The debt of our country is battling a “physical cancer that is growing inside of us that could bring about catastrophic consequences.” There are four deficits: budget, savings, trade, and leadership, aiding our country’s debt crisis. Each of these deficits has their own influence on debt, and each of them has a possible solution.

The United States continues to incur incredibly high yearly deficits leading to a debt level that is getting out of control. In nominal terms, the recent debt and deficit levels are by far the highest the U.S. has ever experienced. In terms of percentage of GDP, debt and deficit levels are higher than they have ever been in a time of relative peace in U.S. history. With the U.S. not currently involved in a major war or crisis, it is economically unsustainable to continue running these deficit levels. This is the most important fiscal policy issue that needs to be addressed.

The debate over the effectiveness of deficit spending has been ongoing for years and will continue to be debated for years to come. Keynesian economists argue deficit spending is necessary for the survival of an economy, claiming the economy would not recover fast enough without it. Other economists argue an economy shouldn’t

The federal government is currently running a large budget deficit. “By the end of the current fiscal year, the country will be almost $31 billion in the red…$1.3 billion beyond the $29.4 billion deficit [] forecasted in the March 2016 budget” (Minsky, 2016).

In 2007 the U.S government deficit has increased by $3 trillion over the past 10 years. Since 2008, the U.S debt has grown from $9 trillion to about $15 trillion over a few years. Today the U.S federal debt averages around $21 trillion dollars according to the FY19 federal budget. People must concern themselves with the possibility of there being a time where all the money in the federal budget must go towards paying the government's debt and interest rates. As well as what issues people will incur as a result of a  lack of government spending. Of course raising taxes as an option can increase government revenues, but consequently the GDP growth will suffer. Without GDP growth, there will be an off balance of government spending and cuts will need to be  made to help those in underfunded communities. Cutting government spending will lead to a ripple effect of negative bust to the economy. For instance, healthcare cost may increase, and people in low income communities will bear the cost of having to go without it, because they can no longer afford to pay it. Economic growth will decline as well, because every dollar that the government has to spend on paying back its debts will be taking away money from more productive areas of the economy. This stunts growth because governments do not efficiently allocate their resources which leads to a decrease in economic production, worsen recession, and an increase in income taxes. Increased taxes can