The Budget Deficit For Fiscal Year

1019 WordsApr 17, 20165 Pages
Pros & Cons As said plenty of times throughout this semester, you are guaranteed two things in life and that is death and to pay taxes. Yes, taxes, taxes help fund our schools, build/fix roads, social security, Medicare, Medicaid, military/security defense, safety net programs, and of course the interest on our national debt. The federal government must make regular interest payments on all the money borrowed from other countries. Budget deficits, budget surplus, national debt, deficit spending all have pros and cons. The federal government collects fees, taxes and certain revenues every year while spending in other fields. Deficits happen when total expenditures in a fiscal year outweigh the total revenues, when this happens; the…show more content…
Government income fell from $2.568 trillion in fiscal year 2007 to $2.1 trillion in fiscal year 2009 and didn’t recover until 2013. The attacks on 9/11 hurt the recession too; it drove military spending to a record of $671 billion dollars in 2007. The US government borrows money from two sources, the public and itself to fill in these budget deficits. The government borrows money from the public by issuing treasury bills, notes, and bonds. The treasury bills are for short-term borrowing. About 60% of the held American debt belongs to Americans, foreign lenders hold the other 40%, China is the biggest party that holds about $800 billion in treasures, and Japan is right behind them at $725 billion. A budget deficit isn’t always bad, sustained deficits have some risks with them, but small deficits may have some benefits. Borrowing in order to invest in infrastructure, education, or similar projects to improve economic growth over the long term. The benefits that accrue from the investments will pay more than just the interest incurred on the debt, it’s similar to when an entrepreneur borrows to start a new business or a student takes out loans to pay for education. These would be good borrowed funds, and help the borrower in the long term. Some cons to running budget deficits would be borrowing money in bad ways, for example, it can become risky as interest payments grow and take up large shares of your expenses,
Open Document