Budget Deficit - 1183 Words

Budget Deficit For many decades, there has been a concern for the deficit within the United States. Many politicians, authors, newscasters, and citizens have expressed their distress in order to resolve or control the issue. Keynesian economic theory states that running a budget deficit is okay, as long as the deficit is not exorbitantly large and is not carried for a long period of time. Even though many experts agree with this notion, having a deficit at all is important to the present and future economic stability of a country. For the most part, the uncontrolled increases in spending and reckless tax cuts in the past have damaged the federal budget, which the White House and Congress have allowed to occur. President Bush has†¦show more content†¦However, after the economy has recovered, the deficit becomes a problem. In the event that the current deficit is not handled properly, the country will begin to see the weakening of the production of goods and services, in turn forcing w ages to decrease. Interest rates will rise, which will make it harder for households and businesses to acquire loans. These factors will increase the strain on the American public and unfortunately lower the ability of the government to intervene, due to the already high deficit. In addition, interest obligations of the federal government are slated to grow from $155 billion in 2004 to $514 billion in 2014, or by $359 billion. These extra costs are the result of both rising interest rates and increased borrowing by the federal government. In order to sustain the economic power and prosperity that the United States has created, major change must be implemented by government leaders, not by career politicians. When a budget is in deficit there are only two ways, other than faster growth in the economy, to bring it into balance. Spending must be cut or revenue increased. Obviously, cutting spending to many of the current governmental programs is difficult because they have already been implemented and deemed necessary. Increasing taxes is also a difficult issue for politicians to handle and for the public to accept. There needs to be a healthy mix of these two options that keeps the economy powerful, whileShow MoreRelatedThe Federal Budget Deficit662 Words   |  3 Pages 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 - $600bRead MoreFederal Budget Deficit1343 Words   |  6 PagesExcessive Borrowing: Our Federal Government s Budget Deficit Maria comes home one day earlier than usual. Her family, two daughters of age five and eight and a stay-at-home husband, is surprised to see her so early and unexpectedly. The tired look on her face reveals the experience she had at work. She brings out a sluggish smile as her daughters rush up to greet her with their warm embraces, reminding her of the happiness they constantly provide but also saddened by their questionable futureRead More budget deficit Essay1590 Words   |  7 Pagesmess.quot; Famous last words heard from the mouths of many different politicians when talking about the national debt and the budget deficit. Our debt is currently $4.41 trillion and we have a budget deficit of around $300 billion and growing. Our government now estimates that by the year 2002 the debt will be $6.507 Trillion. While our politicians talk of balancing the budget, not one of them has proposed a feasible plan to start paying down the debt. In the early days of our government debt was c onsideredRead MoreThe Budget Deficit For Fiscal Year1019 Words   |  5 Pagespayments 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 government borrows money from foreign countries to pay the difference. The budget deficit for fiscal year (Oct 1 2015- Sept 30, 2016) is projectedRead MoreBudget Deficits and the Economic Growth1943 Words   |  8 PagesBudget Deficits and Economic Growth Joey Willoughby ECO 203 Principles of Macroeconomics Instructor: Nathan Rondeau 6/27/2011 Budget Deficits and Economic Growth Economists generally agree that high budget deficits today will result in the reduction of the growth rate of the economy in the future. The United States budgetary situation has disintegrated significantly since 2001, when the CBO ( Congressional Budget OfficeRead MoreFederal Budget Deficit And The National Debt1524 Words   |  7 Pages These two graphs are dealing with the federal budget deficit and the national debt and just how diverse they are from the time differences with both begging approximately in the 2001’s and making their way to 2013. Different types of numbers, but the relationship between the Federal budget deficit and the national debt is by how the Deficit deals with taking the difference of what the U.S. government gets in from taxes or other revenues calling these receipts, but on top of that the amount of moneyRead MoreThe Federal Budget Deficit And The National Debt747 Words   |  3 PagesAlvarado ECON 2301.SY2 The Federal Budget Deficit and the National Debt The United States national debt is large. The U.S. Debt-to-GDP ratio has grown to over 60 percent in recent years. We are more than $15 trillion in debt. In this paper I will address the federal budget, the United States debt, and the resulting impacts on society in several sectors. In our textbook, â€Å"Principles of Macroeconomics,† the relationship between debt and deficit is described. A deficit is a shortfall in revenue for aRead MoreBudget Deficit And Its Effect On The National Debt1403 Words   |  6 Pagesthe past 60 years has Britain s budget been in surplus, most recently in 2001-2002. A budget surplus occurs when tax revenue is greater than government spending and interest payments. Therefore, the government can use the surplus revenue to pay off the national debt. The budget deficit is the annual amount the government has to borrow to meet the shortfall between current receipts (tax) and government spending, for example by the end of 2009-10 our annual deficit was  £170.8 billion. The argumentRead MoreBudget Deficit Is The Amount Of Federal Money2047 Words   |  9 Pages1) Budget Deficit Def: It is the amount of federal money spent each year that is more than the federal income, so that the federal expenditure is greater than the federal revenue. CE: In 2016, the Congressional Budget Office faintly decreased the estimation of the government’s budget deficit by $10 billion from the original $534 billion for the fiscal year of 2016. 2) Expenditures Def: It is the amount of federal money or revenue that is spent, especially on social programs like social securityRead MoreNational Debt and Budget Deficit Essay652 Words   |  3 Pagesimportantly 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. InvestorWords.com defines a budget deficit as the amount by which a government, company, or individuals spending exceeds its income over a particular period of time. To remain within the limits of one’s income would create a budget surplus;