Deficit Spending After World War II

Deficit Spending After World War II
needs a little work could use a few more examples
here's one on the deficit for those economics classes
Subject: the deficit good or bad
Deficit Spending
"Spending financed not by current tax receipts, but by borrowing or
drawing upon past tax reserves." , Is it a good idea? Why does the U.S.
run a deficit? Since 1980 the deficit has grown enormously. Some say its
a bad thing, and predict impending doom, others say it is a safe and
stable necessity to maintain a healthy economy.
When the U.S. government came into existence and for about a 150 years
thereafter the government managed to keep a balanced budget. The only
times a budget deficit existed during these first 150 years were in
times of war or other catastrophic events. ... Show more content on Helpwriting.net ...
Instead a deficit would allow more people to work, increasing
productivity. A deficit does this because it is invested into the
economy by government. For example if the government spends deficit
money on new highways, trucking will benefit and more jobs will be
produced. When an economic system is in recession all of its resources
are not being used. For example if the government did not build highways

we could not ship goods and there would be less demand for them. The
supply remains low even though we have the ability to produce more
because we cannot ship them. This non–productivity comes at a cost to
the whole economic system. If deficit spending eliminates
non–productivity then its direct monetary cost will be offset if not
surpassed by increased productivity. For example in the 1980's when the
huge deficits were adding up the actual additions to the public capital
or increased productivity were often as big, or bigger than the
deficit. This means as long as the government spends the money it gains
from a deficit on assets that increase its wealth and productivity, the
debt actually benefits the economy. But, what if the government spends
money on programs that do not increase its assets or productivity. For
instance consider small businesses. If the company invests money to
higher a new salesman then he will probably increase sales and the
... Get more on HelpWriting.net ...

Analysis Of The Federal Budget Deficit And The National Debt
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
on Helpwriting.net ...
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

The National Debt Of The United
The national debt of the United Stated has long been a large source of controversy, especially given
the last four years having had $1 trillion deficits consecutively. The United States national
government has overspent and run a deficit for the last 45 of 50 years. The US national debt is
quickly approaching $20 trillion, and the budget deficit is still very high.
The debt and the deficit are two different terms. A budget deficit refers to when the government
spends more than they had in the budget, also when the government spends more money than it
brings in. The national debt is all of the past deficits added together, minus the amount that the
government has already paid. The national debt can affect the deficit. For example, the interest that
is owed on the national debt is added to the deficit each year, and about 5% of the budget each year
goes to paying interest payments on the debt. The deficit that is reported each year in the federal
budget does not include what congress owes to the Social Security Trust Fund. So a more accurate
idea of the annual deficit would be found by looking at how much the national debt has increased.
Every year that the government overspends and has a deficit this amount is added to the national
debt. The last four years of budget deficits have pushed the national debt over 100% of America's
gross domestic product.
Over the last 40 years the federal government has generally spent more than what they had in the
budget, and in order to be

Budget Deficit And Its Effect On The National Debt
Only eight times in the 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 argument of the chancellor is that with national debt 'unsustainably
high' periods of economic growth should be taken as an opportunity to pay down debt and reduce
the burden for future generations.
To analyse the projection 'The British Government is currently expecting to see the budget deficit
turn to a surplus in 2019/20', it is key to first understand the proposals put forward by Chancellor
George Osborne on how this budget surplus is to be achieved. Osborne proposed a legally binding
charter regarding government spending in 'normal' economic times which passed 320 to 258 in the
House of Commons. Essentially this means the amount that the government can spend will be
capped by the charter when the economy is growing by 1% a year or more, in order to see a budget
surplus by 2020. Furthermore Osborne plans to further decrease borrowing, which has been
decreasing at a fairly high rate since 2012 – 2013, in order to meet his plans of a budget surplus by
2019–20. The

The Budget Deficit For Fiscal Year
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 on Helpwriting.net ...
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,

National Debt Vs. Federal Deficit
National Debt vs. Federal Deficit
What word begin with "d" ends with "t", and has to deal with the nation 's budgets? Well if you
guessed debt, then you are absolutely correct. Or deficit, because both fit the criteria just fine.
Though these words look alike, they are not interchangeable. The difference between the two is that
while the national debt is getting bigger the federal deficit (as of 2014) is increasingly becoming
less. As of last year it was said that the Obama administration was going to "reduce the overall debt
of the United States by $3 trillion over the next 10 years." This, according to my source, is
preposterously wrong. Going in the complete opposite direction, the national debt is expected to rise
by over 8.6 trillion dollars in the coming ten years.
This chart from the Congressional Budget Office shows federal debt levels projected to rise through
2038.
This chart from the Congressional Budget Office shows federal debt levels projected to rise through
2038.
While the national debt continues to rise at a staggering amount, the federal deficit slowly rising.
The deficit, to my understanding, is the difference between the amount of money the government is
bringing in versus what it spends annually. The incline in the deficit can be credited to higher
government spending and the end of the recession. Because the deficits are growing, they are
causing the national debt to increase. Meaning that even though they are becoming smaller, they are

National Debt and Budget Deficit Essay
Much like a person or a corporation, the United States government uses money for its operations;
meaning that it has both income and expenses. The income of the United States is derived from
various taxes and fees and the expenses are what the U.S. government pays out for national defense,
highways, social welfare programs, and various other programs.
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. ... Show more content
on Helpwriting.net ...
Of course, when we, as individuals, borrow money and we pay interest on it, which increases our
debt.
The U.S. is no different. In fiscal year 2007, the U.S. paid out $430 billion in interest. This
exorbitant interest expense continues to increase the U.S. annual deficit, which in turn, continues to
increase the national debt that now stands at over $9.5 trillion (Hall, 2008).
As anyone who has experienced financial trouble, especially with credit cards, it is the interest on
the debt that creates the biggest problem. For the U.S., the only way to reduce the interest is to
reduce the debt. The only to reduce the debt is to begin paying it off, and the only way to pay off the
debt is to sustain significant surpluses.
The only way to sustain a surplus is to spend less than one receives. On an individual plane, this is
certainly feasible. However, on a national plane, in order to maintain a surplus is to reduce
government spending and increase taxes. No other solutions are possible. References
Budget deficit. InvestorWords.com. Retrieved August 5, 2008, from InvestorWords.com website:
http://www.investorwords.com/601/budget_deficit.html
National debt. InvestorWords.com. Retrieved August 5, 2008, from InvestorWords.com website:
http://www.investorwords.com/601/budget_deficit.html
Adamson, J.C. (2008). What is the National Debt – and What is the Deficit? Retrieved August 5,
2008, from The Muser website:

Essay on The Federal Budget
The Federal Budget
The federal budget is known as the infamous monetary tank from which money is distributed to
various programs. Why does the federal budget plan cause such uproar of approval or disapproval
when it is proposed by the President every February? The money utilized every fiscal year, which
runs from October 1st of each year until the end of September of the following year, belongs to the
people. The money is raised through income taxes, excise taxes (taxes on goods) and social
insurance payroll taxes. Presently, the public is worried about how they will receive a fair share of
money appropriations in such a slow economy. The federal deficit has returned, which means that
the government's spending ... Show more content on Helpwriting.net ...
No one decides on the total amount the federal government will spend. Instead, legislative bills that
determine the total amount of spending are divided up among fifteen separate committees in the
Senate and seventeen committees in the House of Representatives. The Appropriations Committee
has jurisdiction over non–entitlement programs (spending varies year to year based upon spending
authorized by Congress), which covers one–third of total federal spending. The remaining two–
thirds is made up of entitlement programs (spending authorized by permanent laws), which are
handled by other standing committees. The agricultural committees have authority over farm price
supports, food stamps, and other rural programs. The tax–writing committees in the House and
Senate are responsible for Social Security and Medicare. The House Energy and Commerce
Committee has jurisdiction over Medicaid.
The decentralization of spending authority creates deficit financing. By spreading the spending
responsibility among so many committees, Congress has created a commons problems. Numerous
claimants are competing for a commonly owned resource. The forces of competition for the resource
are leading to over consumption and exhaustion of the resource. From the individual committee
perspective the commonly owned resource is federal revenues. The consumers of the resource are
the congressional committees. The common resource is over consumed

The National Debt Of The United States Essay
Introduction The National debt of the United States is currently sitting at over $19 trillion dollars.
There are many public opinions on whether or not this is a risk to the US economy and if this will
lead to our next economic collapse. The National debt is the amount owed by the federal
government to all of those who hold the notes. The outstanding Treasury securities at a point in time
that have been issued by the Treasury and other federal government agencies is the measure of
public debt. When we talk about national deficit and surplus we refer to the government budget
balance from year to year, not a cumulative total of all debt. I want to review the background of the
US debt, how it has reached its all–time highs along with the components, our obligations,
measurements, risks, and foreign holdings and also discuss if there are causes for concern.
Background
The "Nixon Shock" as it's referred to, is said to have opened up the door for our large deficit. Before
President Nixon removed the gold standard in 1971, one could redeem US currency for gold. In
1966 there was sufficient gold to back the dollars held in America though it was not enough to cover
the debt held outside of our borders. When Nixon removed the gold standard it opened the door for
Congressional overspending which happened to be during the Vietnam war. Over the last 116 years
the United States has had a budget deficit 77% of the time, 89 out of those 116 years. A deficit year
occurs when more money is

Budget Deficit: National Debt
Jennifer Desrivieres
ECO2013
Homework#3
Budget Deficit/Debt
A budget deficit is a shortfall of tax revenue from government spending. A budget deficit is an
indicator of financial health in which expenditures exceed revenue. The term budget deficit is most
commonly used to refer to government spending rather than business or individual spending, but can
be applied to these entities. When referring to accrued federal government deficits, the deficits are
referred to as the national debt. A budget deficit is recognized, current expenses exceed the amount
of income being received through standard operations. To correct a budget deficit, the nation may
need to cut back on certain expenses or increase revenue–generating activities, or employ a ... Show
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That date is usually fixed; depending on whether the money is in the form of treasury bills, note,
bonds or one of the many other securities the federal government issues. Even if we don't take
currency into account, the U.S. government's ability to pay thus becomes a brutal, or worthy circle.
The national debt can only be reduced through five mechanisms: increased taxation, reduced
spending, debt reformation, monetizing the debt or outright default. The federal budget process
directly deals with taxation and spending levels and can create recommendations for restructuring or
possible default. Because debt plays such an important part of economic progress, it must be
measured appropriately to take the long–term impact it presents. Unfortunately, assessing the
country's national debt in relation to the country's gross domestic product (GDP), though common,
is not the best approach. As the national debt continues to grow, the question remains: Is it OK to
run a deficit like we have for many years, or do we need to balance the budget? Just like any
average American household, overspending can carry on for extended periods by rolling over debt
and borrowing more and more money in what seems like a never–ending game of chasing our tail.
The government has become an expert at this process. Yet without its spending, some would say our
economy could be in much worse

Essay on Reducing the National Deficit
Reducing the National Deficit
Many United States' citizens are unaware of the country's current financial state. Many assume that
one of the world's wealthiest countries could never be in debt. This is untrue however, and, in fact,
the country with the greatest income per capita is in major debt. This study will examine possible
solutions to reducing the United States' national budget deficit.
Understanding the National Deficit
The amount of money that the United States government owes as of October 17, 2004 at 03:48:52
pm GMT was $7,435,016,998.21. The debt has increased by an average of $1.7 billion per day since
September 30, 2003! From a more individual perspective, currently the United States population is
roughly around ... Show more content on Helpwriting.net ...
The debt skyrocketed to an astounding $279 billion by the year 1946.
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.
Who is the Nation Indebted to?
The United States borrows money from individuals that have bought Treasury Bills, Notes, Bonds,
and United States Savings Bonds. The U.S. government also borrows money by issuing Treasury
securities. These securities finance expenditures that exceed its receipts, and are legal under the
authority of the Second Liberty Bond Act. The government's primary source of income is through
taxes paid by its citizens. Supposedly, money is spent on programs that government officials
consider necessary to ensure the best quality of life for all (or at least the majority) of the nation's
citizens. The combination of these amounts is what makes up the national

Budget Wars : Debt And Sequestration
Nicole Betts
Budget Wars
7/26/2015
Debt and Sequestration in the United States
The United States has adopted a persona of uncontrollable spending policies, and short term
solutions. As the spending trajectory continues in a downward spiral, fueled by unsustainable
policies, and current tax revenues, the national debt continues to grow. For many years, the United
States has implemented policies that failed to address mandatory spending costs, which,
unfortunately continue to outpace the national economy. Furthermore, Congress has created a habit
of introducing short term solutions in order to confront a long term issue of national debt. Although,
there are many driving forces behind the U.S. fiscal problem, mandatory spending ... Show more
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First of all, the BCA began reductions on spending through the installment of strict caps on
discretionary spending programs. These caps are anticipated to reduce federal spending by $841
billion by 2025.
Furthermore, in 2011, the BCA created a "Super Committee", otherwise known as the Congressional
Joint Select Committee on Deficit Reduction. This committee was made up of 12 Congress
members, 6 of which or Democratic, and 6 who are Republican. The members were instructed to cut
an additional $1.5 trillion from the nation budget. Interestingly, the bill stipulated that if the
committee was unable to come to agreeance with Congress by December 23rd, there would be
automatic across the board cuts, this process became known as sequestration. This procedure is
simply the governments' formula to cut $1.2 trillion from spending programs. Interestingly,
sequestration does not promote equal cuts to each program, instead various amounts are withdrawn
from each category. For example, in 2013 sequestration cut , 5.1% from Domestic Discretionary
spending , 7.6% from defense, 2.% from Medicare, and 5.2% from other areas. Interestingly, Social
Security food stamps, and a number of other mandatory programs remain exempt from
sequestration.
Government Spending
Congress creates a budget by each fiscal year which divides funding into mandatory, and
discretionary spending programs. Discretionary spending is implemented through appropriation

Fiscal Policy Paper
Fiscal Policy
ECO/372
June 11, 2012
Fiscal Policy All the people in the United States are effected by the fiscal policies. Team C will
address the how and why the U.S. budget deficits, budget surpluses and debt effect different
individuals and institutions. There are a wide array of individuals effected by fiscal policy, which
include tax payers, future Social Security and Medicaid users will be effected. The unemployed
individuals and University of Phoenix students will be effected by fiscal policy. The U.S. financial
reputation , an exporter, and importer, and effects of the GDP will also be covered about the effects
of the U.S fiscal policy.
Effects on Tax Payers The U.S. budget deficits can affect tax payers in a ... Show more content on
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The Department of Education offers an income based repayment option to assist unemployed
individuals in repaying their student loans, until they are financially secure to pay the required
minimum payments (Worksham 2012). Effects on University of Phoenix Students University of
Phoenix students along with other college students are affected by budget deficits, budget surpluses,
and debt. These students are affected in different ways because of the economy. Budget deficit
occurs when government expenditures exceed government revenues. Debt is the accumulated
deficits less accumulated surpluses (Colander, 2010). Congress takes money from student loan
programs when there is a shortage and redistribute for other purposes (Nelson, 2011). Earlier this
year President Obama disclosed the proposed budget for the year and the area that will be affected is
the Federal Pell Grant Program (Quinn II, 2011). The Pell Grant is awarded to students to help pay
for college expenses and does not have to be paid back. A budget surplus would enable the students
to continue receiving help from the government because there would be an excess amount of funds
to distribute out. Effects on the United States' financial reputation on an international level Budget
deficits, budget surpluses, and debt affect the United States financial

Federal Budget Deficit And The National Debt
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 money they spend calling these outlays. Some of these items included in the deficit
would be on– budget or off–budget. While in the other hand when we think about the total debt as
all the deficits added together plus all of the accumulated off– ... Show more content on
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Treasury sailing IOUs towards the government in the form of securities, which are called bonds.
When this occurs the effect goes by when the federal government asks U.S. and foreign households,
business, and governments to lend them money that will cover the deficit they have created.
Covering the deficit, but also has indebtedness to bondholders as well. They should be concerned
with "crowding out," just because the mechanism by which investment is crowded out is an increase
in the interest rate. By more sales of securities, this would cause them to raise the interest rates on
the bonds to even have anybody wanting to buy them. These higher interest rates on bonds are going
to discourage private sectors investment and spending and these high rates causes a reduction in the
growth in capital formation, which in turn slows the growth of productivity and improvement in
society's living standard. Increasing the level of spending by the present generation crowds out
investments and reduces the growth of capital goods, leaving those in the future generations with a
smaller capital stock leaving them not to be as wealthy as they wanted to be before because this
affect.
Crowding out refers to the government providing a service or good that would otherwise be that
business opportunity for private industries. So if Crowding out was to occur, an increase in the
demand for loanable funds by the government shift the loanable demand curve to the right and up,
of course

National Debt Is Not Always A Bad Thing
When I first thought of national debt I thought about only the cons and disadvantages of having it. I
never gave thought as to what the advantages of having it may be. National debt is the amount of
money the federal government owes to lenders outside of itself. "When the Treasury borrows funds,
it issues Treasury bonds; these are IOUs of the federal government. In other words, the national debt
is a stock of IOUs created by annual deficit flows." (Schiller 261) With the help of research and my
economics class, I have learned that having national debt is not always a bad thing. For example, the
financial crisis of 2008–2009 and the effects it had on the economy and people was horrible.
However, I learned that if it weren 't for the increase in government borrowing by bailing out banks
and financial markets, the banks and financial markets could have froze and that would have thrown
us into a Great Depression type run on banks. If the government uses its debt the right way, then it
will allow the government to do things that it couldn 't really do before. I believe investing that debt
instead of spending it would be the wiser choice. The government sometimes spends money so that
consumers will have money but they just end up spending it. This is just a way for the government
to stimulate spending at that moment. That 's just a short term benefit. Therefore, by investing its
debt in things such as medical and technological research and education will create a long term

Federal Deficit And The National Debt
This paper is about the last 15 years of the federal deficit and the national debt, as well as
examination their relationship. This paper also looks at how the deficit is created and dealt with,
along with what happens to different areas of the economy when the deficit's size changes. Lastly
this paper covers who owns the national debt, how these people are paid off, and the interest rate of
the debt.
Federal Budget Deficit with a sprinkle if National Debt (1, 2, 3) The federal budget deficit and the
national debt are two different things, but are connected in a parasitic way. The federal budget
deficit is when the government spends more than in receives; it is also a flow value, meaning that
the amount of the deficit is something that occurs over time (Miller, 2014). The deficit for the past
15 years is shown in Appendix A, and the deficit is the host, not the parasite. The national debt
however is the parasite, and it is known as the total value of all federal government deficits minus
the amount that the government has repaid. The debt is also a stock value, or something measured at
an exact point in time, and its last 15 years appears in Appendix B (Miller, 2014). The reason why
the deficit and debt are in a parasitic relationship is because the budget deficit can exist without the
debt, like a host does not need a parasite, but the debt cannot live without the deficit. The federal
budget deficit comes into existence when the government spends more than it earns

The Federal Budget Deficit And National Debt
The Federal Budget Deficit and National Debt Basically, what the federal budget deficit is a
shortage of funds that are available for the government, where more money is being spent than what
the government receives. But, national is where the government borrows money through various
ways. The data for national debt and federal budget deficit from the year 2001–2013 is given in the
chart above. As we can see in the graph, the deficit is still remains in our economy even though
there had been a surplus in 1999 to 2001. But, we could see a lot if decreases such as from the year
2004– 2007, 2009–2010 and also from 201–2014, but generally the deficit kept increasing yearly.
The data provided is in trillions and a positive value means ... Show more content on
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From the graph above, for instance, we could say that the budget deficit increased rapidly from
2007–2009 and we could say that the main is due to the Great Recession. The governments act
trying to counter–attack this effect by improving fiscal policy for the betterment of business cycle
lead to more outlay than revenue, which resulted in the increase of the deficit promptly. So,
therefore borrowing the money to deal with deficit lead to increase in the national debt. Crowding
out occurs when spending by an individual or an organisation or to be more precise, private
spending decreases and by increasing the government spending. People sometimes use this as an
alternative replacement and lets the government to spend more. This is a very big problem causer
because as the government decided to spend more, it leads to higher budget deficit and debt and the
overall spending may decline rapidly. So, therefore if they let the government to spend more instead
of them it results to the lesser consumption of resources and spending on it. This can lead to
decreasing the interest rates which results in less investment by people and major drop in the
business sector. In order to shift the economy up from the times and effect of the great recession,
government tend to raise the budgets at times, government give more outlays in the form of social
security and other fiscal policy techniques. As a result, the government borrows capital to pay for
this,

Budget Deficits and the Economic Growth
Budget 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 Office ) forecast average annual
surpluses of nearly $850 billion from 2009 – 2012. In April of 2011, it was revealed that our nation
is 12.7 trillion dollars in debt which surpasses by a wide margin, the 2001 CBO forecast of a
cumulative surplus by ... Show more content on Helpwriting.net ...
Unless the deficit spending is allotted to purchases resulting in long – term increases in real GDP,
future generations will have to endure taxation at an elevated rate. This is the only way that the
government entity will be capable of retiring the elevated public debt which has resulted from this
generation's consumption of goods, provided governmentally. Added to this dilemma, the increased
level of consumption by this same generation crowds out investment, thus a reduction of capital
goods growth is apparent, leaving future generations with insignificant capital stock and a drastic
reduction of their wealth. ( time.com) In relation to our foreign debt, future generations may be
taxed to repay this exorbitant debt plus aggregated interest however this does not have to be "etched
in stone." It all depends entirely on the projects that the government funds in the future. If these
projects are of a wasteful nature our future generations may face yet another added burden. This
would also stymie the growth rate of the economy in the future. The deficit must be maintained to
ensure that the nation's economy grows with its resource position. Our nation must do everything in
its power to reduce the deficit. Economic growth is also further impaired by government borrowing,
which essentially is competing for money against the private sector. The continuance of government
borrowing is denying the U.S.

Eco 459 Research Proposal
Anthony Badolato
Eco 459 Research Proposal
Introduction & Motivation
The idea of Twin Deficit, originally proposed by 1980s economists such as A.F. Durrat (1988), has
evolved into a complex debate between itself and its counterpart, Twin Divergence. Some accept the
original theory of twin deficit, claiming a large fiscal deficit and a large current account deficit go
hand–in–hand. Others argue that the opposite is observed in certain countries, which exhibit twin
divergence (see Kim and Roubini 2008). Understanding which principle a country is currently
adhering to is undoubtedly important for policy–making, as the national government can use that
information to make educated spending decisions to support its economy. But which countries ...
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Depending on whether or not we assume the net private savings is held constant will determine what
we can predict to observe. If it is assumed to be constant, the twin deficit hypothesis would seem
correct. If it is not assumed to be constant, then it is plausible that a shock to current account or
fiscal account can be compensated for by a change in net private savings, giving possibility to the
presence of twin divergence.
My Contribution and Methodology
I will test the following hypothesis; Wealthy countries can exhibit twin deficits, while developing
countries can exhibit twin divergence. I will use a sample of 3 (?) "developing" countries and 3 (?)
"wealthy" countries and attribute a twin principle (deficit or divergence) to each, based on existing
empirical data, according to equation (5). To draft a suitable model for estimation, we will have to
reform equation (5), following the ideology of Sakyi and Opoku (see Sakyi & Opoku, 2016), so that
we can use available public data. Theory suggests that a country's private saving, SP, is positively
related to households' disposable income, ¬y, and the interest rate, r. Using the same process,
national investment, I, is negatively related to r. Therefore, our model will be based off the
following

Deficit Spending Research Paper
The United States is a wealthy country harboring a strong economic system. In 2010, the gross
domestic product, GDP, was approximately $14.6 trillion dollars which supplied about $2.16 trillion
in tax revenue. With this money, the country funds everything from healthcare for the poor and
elderly to the education system that will produce our next great minds. However amidst sea of
prosperity, there is a whirlpool draining the treasury and threatening America as a world power. A
policy of deficit spending has dragged us into deep debt and lawmakers are reluctant to even admit
there is even a problem. Instead of choosing to address the issue when it was first identified, they
have played politics with it and a financial crisis now looms. ... Show more content on
Helpwriting.net ...
With a projected deficit of $1.27 trillion this fiscal year, we, as citizens, cannot afford to stand by
quietly and allow this unsustainable rate of spending to continue (Clueless, 2010). America's fiscal
policy is regarded as unsustainable because borrowing has both explicit and implicit costs associated
with it. The explicit costs are the interest payments we make on the national debt. According to The
Moment of Truth: Report of the National Commission on Fiscal Responsibility and Reform, we will
pay $226 billion in net interest and projects that to rise to $938 billion by 2020. Also, if you add the
interest payments over the next ten years, it amounts to a staggering $5.76 trillion dollars (2010).
That is more than one–third of the present–day GDP and threatens to keep getting larger. This brings
us to the implicit costs. The $5.76 trillion we are projected to spend on debt interest is empty
spending. It does not provide anything to the nation's future and forces us to forgo spending it in
ways that would have resulted in a positive return, such as: education, energy and technology. To
make matters worse, more than 50% of our debt is not owned by Americans but by foreign lenders
(Murphy, 2010). In other words, less than half of the interest payments go to American lenders who
are likely to spend it domestically and strengthen the economy, another implicit cost. There are
many fears that foreign lenders controlling so much of

National Deficit and National Debt Essay
The growing national deficit is a looming problem in the United States now more than ever. The
national debt is constantly increasing and government spending is out of control. If these issues are
not solved then they could spell disaster for the nation's economy when the infamous debt ceiling is
finally reached. Currently the national policy on the debt is to continue raising the debt limit until a
solution is found that is agreeable between both parties in Congress. The two main issues of over
spending and the constant raising of the debts ceiling by Congress can both be resolved by
government spending reform, balancing the federal budget and initiating pro–growth policies in
order to increase the government's tax revenue. The debt ... Show more content on Helpwriting.net
...
The other issue that is facing the American government is overspending. Overspending is a pertinent
problem facing the lawmakers in Congress. In 2012 discretionary spending reached $1.3 trillion and
mandatory spending $2 trillion, while only bringing in $2.5 trillion in revenue. Since the turn of the
century back in 2000, non–mandatory spending by the government has topped out a whopping $16.1
trillion just in the past 13 years (Boccia, Frasser & Goff 2013). This persistent overspending on
programs and services that are not necessary to the functionality of the country is what is causing
the deficit to rise year after year. To remedy this issue the government must either increase the
revenue it brings in through taxes and trade or reduce the amount of money it spend or perhaps even
both. In 2012 thirty–one cents of every dollar that Washington spent was borrowed (Boccia, Frasser
& Goff 2013). Most of which went to large programs such as Social Security and Medicare and if
these large, growing programs, or just the budget in general, do not undergo financial reform it
could spell disaster for the economy and fiscal state of the nation. Government spending in the
United States needs to change and it needs to change soon. As mentioned earlier, in 2012 nearly a
third of governments budget

Morocco And Liby Is Economically Healthier?
Which country, Morocco or Libya, is economically healthier? Morocco and Libya have many
similarities along with their differences. The differences regarding ten economic factors in this
countries will ultimately determine which country is economically healthier. Similarly, Morocco and
Libya largely consist of Arab and Berber ethnicities, Arab and Berber make up 99% of Morocco's
ethic groups ^4 while in Libya Arab and Berber ethnicities make up close to 97% of its population
^3. Both countries recognize Arabic as their official language and in both countries Muslim is the
most practiced religion, in Morocco 99% of its population of 34 million ^4 (39th in comparison to
the world) practices Muslim and in Libya 96.6% of its population of 6.2 million ^3 (108th in
comparison to the world) practices Muslim. Morocco ^2 and Libya ^1 are quite close to each other,
both located in Northern Africa (see maps 1 and 2), with Algeria sitting in between them. Although
these countries are within the same area, they differ in size drastically, Libya is 1.7 million square
kilometers ^1, 17th largest country in the world, while Morocco is only 447 thousand square
kilometers ^2 being the 58th largest country in the world. In Camille Tawil's (2013) report she
explains the reasons why Libya is currently politically unstable due to the transition from the old
authoritarian rule to a new democratic order considering its government is defined as "under
transitional government" ^5 (para. 1). Morocco,

A National Debt Is The Difference Between The Government...
In the simply way, a national debt is the difference between the government's budget/deficit and the
expenditures. The U.S. federal debt was set up by the first Treasury Secretary, Alexander Hamilton.
Our initial debt incurred during the American Revolutionary War. Over the following 45 years, the
debt grew. Although, the national debt actually shrank to zero by January 1835, under President
Andrew Jackson, it quickly grew into the millions again, soon after. The American Civil War
resulted in dramatic debt growth. The debt was just $65 million in 1860, but passed $1 billion in
1863 and had reached $2.7 billion following the war (USGovernmentSpending.Com). At the
beginning of the 20th century, the total government debt was "equally ... Show more content on
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Next, President Bush increased the national debt further to fight the war on terror and bail out the
banks. In summary, between 1980 and 1990, the debt more than tripled. The debt shrank briefly
after the end of the Cold War, but by the end of 2008, the gross national debt had reached $10.3
trillion, about 10 times its 1980 level (USGovernmentSpending.Com). There has been continues
increase in U.S. national debt in the 21 century. In recent years there has been a "debt ceiling" in
effect. Whereas Congress once approved legislation for every debt issuance, the growth of
government fiscal operations in the 20th century made this impractical. The Treasury was granted
authority by the Congress to issue such debt as was needed to fund government operations as long
as the total debt did not exceed a stated ceiling. The "ceiling" is routinely raised by passage of new
laws by the United States Congress. In recent years, that national debt is a fact of life. Based on the
government statistic data, the U.S. debt has surpassed 100 percent of gross domestic product (GDP),
and "public debt may approach 190% of GDP by 2035" (Driver and Matthew 2). During the last 15
years we experienced a massive increase of the debt. There are several factors that lined up to cause
this situation. One of the biggest issues is the overburdened Social Security system. Due to
increasing number of retirees and longer life spans leading to more benefits payments, and
decreasing

The Debate Over Time To Reduce The Budget Deficit
We have a long story of debt, but it seems no one has been able to make it better. If the debt is
increasing over time, the government has a budget deficit. Charles C. Turner, et al, define deficit as
spending that exceed revenue (482). In history, basic deficit or debt was usually from over spending
from a war and economic issues like a recession or depression. Then the government had a budget
deficit almost every year "between 1970 and 1997," but tax cut and more spending on defense by
President Reagan in 1981 added more growth to the deficit. Also, another cause is from reducing of
productivity seem in the GDP and lower tax rate (tax cut) (483). Even when the government had
some budget surplus, still, it could not cover the debt. In 2012, the debt grew "over $ 16 trillion,"
(482–483) and has increased more in recent year plus 2.9 percent of budget deficit in 2016 (The
2016 Long Term Budget Outlook, 2). To manage the economic depression, sometime policymakers
cut the taxes and increase spending again by putting more money into private sectors (Turner, 483);
therefore, government goes further with the budget unbalancing. There are several reasons that
lower tax rate will not reduce the budget deficit closer to a balance.
First, lower tax rate will lower revenues. Overall tax cuts for a new coming year will bring different
amounts of revenue from the previous year if the tax rate falls below a previous percentage. For
example, Ramesh Ponnuru said that Mr. Trump's plan will

Essay on Out of Control
The United States is a wealthy country harboring a strong economic system. In 2010, the gross
domestic product, GDP, was approximately $14.6 trillion dollars which translated into about $2.16
trillion in tax revenue. With this money, the country funds everything from healthcare for the poor
and elderly to the education system that will produce our next great minds. However amidst sea of
prosperity, there is a whirlpool draining the nation and threatening its survival as a world power. A
policy of deficit spending has dragged the United States into deep debt and lawmakers are reluctant
to admit there is even a problem let alone address it. They have played politics with the issue for too
long and a financial crisis now looms over our ... Show more content on Helpwriting.net ...
America's current fiscal policy is regarded as unsustainable because borrowing has both explicit and
implicit costs associated with it. The explicit costs are the interest payments we make on the national
debt. According to The Moment of Truth: Report of the National Commission on Fiscal
Responsibility and Reform, we will pay $226 billion in net interest and projects that to rise to $938
billion by 2020. Also, if you add the interest payments over the next ten years, it amounts to a
staggering $5.76 trillion dollars (2010). That is more than one–third of the present–day GDP and
threatens to keep getting larger. This brings us to the implicit costs of uncontrolled borrowing to pay
for our growing deficits. The $5.76 trillion we are projected to spend on debt interest is empty
spending. It provides nothing to the nation's future and eliminates other possibilities that could have
resulted in a positive return, such as: education, energy and technology. To make matters worse,
more than 50% of the debt is not owned by Americans but by foreign lenders (Murphy, 2010). In
other words, less than half of the interest payments are to American lenders who are likely to spend
their gains domestically and strengthen the economy, another implicit cost. There are many fears
that foreign lenders controlling so much of America's liabilities is problematic for the

National Debt Of The United States
In today's hectic world of politics there are many talking points and issues that require attention.
National debt has been a key issue in the past that has gotten a lot of attention of the public and in
the general elections. National Debt or Federal deficit is the total amount of money the government
has borrowed from any source. The national debt in the United States is currently
$15,236,332,233,848.35 and growing. The national debt per U.S citizen is about $48,852.95. These
numbers are made up of public debt and Intergovernmental Holdings. Over the past 50 years
national debt has increased exponentially. The national debt of the United States is very important to
the US economy because the U.S has the biggest economy and is a major world super power. Issues
such as National debt stir up public interest and gain a lot of attention because it affects the job
market and peoples investment. There are many causes and effects to the increase of the national
debt and there are different opinions and ideas on how to resolve this issue. It is greatly debated to
what events or policies caused the National Deficit to be what is today. There are many causes to
why the United States is in the tremendous debt it is in today. Many Americans or people in general
do not know exactly how the US government actually borrows its money. To clarify, the
Government is different from individual people and businesses borrowing money. When the
Government borrows money, it doesn't go to the bank

Assignment On Government And Budget Depitment
ECON 2301– Writing Assignment
Malmi Senaweera
1).
2). According to the two graphs above, the federal budget deficit and the budget deficit as a
percentage of GDP shows that the government has been running with deficits for the most part of
last twenty years. The graph shows a budget surplus from 1998–2001, but from 2002 to present year
it shows a budget deficit. The deficit has been the largest in 2009 due to the Great Recession and the
graph shows significant improvements in the recent years.
3).
4). The U.S. national debt graph illustrated above shows the increase of the national debt over the
last twenty years. There shows no significant change from 1996–2001. The debt rate has since
gradually increased and after the Great Recession in 2009 it has been in an onward strike. The U.S.
national debt as a percentage of GDP graph shows a downward trend from 1996–2001, but has
increased gradually over time. Even though the graph shows a drop in 2015, it has risen by the next
year.
5). When the government revenue is higher than government spending there is a surplus, but when
government spending is higher than revenue it is called a deficit. That is how a budget deficit comes
into existence. To deal with a budget deficit the administration can cut down on its expenditures
and/or increase revenue generating activities like collecting more taxes. (class textbook)
6). When government spending and borrowing results in the increase of interest rates and reduces
business

The Federal Budget Deficit And The National Debt
Marilyn Alvarado 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, "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. Government spending began to really grow
around 2001. This was partly due to the 9/11 terrorist attack. Additionally, there has been an increase
in spending with Social Security and Medicare. In response to

Advantages And Disadvantages Of Deficit Spending
Deficit Spending and the Crowding Out Effect
Andrew L. Petereck
American Public University System
Abstract
Deficit spending applies to businesses, governments, and individuals alike. In relation to
governments, deficit spending refers to spending more money than taking in over a given period
(Investopedia, n.d.). Some Keynesian economists argue that deficits are a necessary evil needed to
stimulate an economy. In theory, the deficit spending fills a gap in consumer spending during a
recession by increasing government purchases to balance out the aggregate demand and stabilize the
unemployment rate (Investopedia, n.d.). However, the downsides to deficit spending include
possibly lowering GDP and increasing debt. Lastly, crowding out is known as the process where
high government spending takes opportunities away from private sectors, hence the name "crowding
out" (Investopedia, n.d.). This paper will explain some of the advantages and disadvantages to
deficit spending while reviewing some of the effects of crowding out in an economy. Keywords:
deficit spending, crowding out,
Deficit Spending and the Crowding Out Effect 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 American National Debt Crisis
Introduction
In brief, citizens and companies will get a loan from a bank but when the US Government needs a
loan it issues debt by selling Treasury financial instruments to other federal government agencies,
people, companies, state– and local–governments, as well as to such equivalents abroad (Bureau of
the Fiscal Service, 2013). The deficit is the ratio of spending and revenues in one year, but the
national debt or federal debt is the sum of all previous deficits, less whatever sum the federal
government has subsequently repaid. Hence, every annual government deficit due to borrowing is
added to the national (federal) debt. A government surplus can reduce some of the national debt.
Annually, the national debt incurs interest to be paid by the government which is linked to overall
government spending (National Priorities Project, 2016).
This paper will present and discuss the American national debt situation, propose two possible
solutions and finally will endeavor to steer a conclusion as to which solution to follow.
Current national debt policy and issue
The United States (US) has a rising national or government debt (Nanto, 2011, p. 4), which in 2010
for example stood at $13.6 trillion (The Heritage Foundation et al., 2010) and in mid–2015 stood at
$18.153 trillion (National Priorities Project, 2016). Combined with its future forecast (i.e. at $22.4
trillion by the end of this year of 2016, Chantrill, 2016) the national debt is unsustainable and the US
is confronted

U.s. Government Budget Deficit And Debt
There are many original and ingenious opinions and analysis related to a topic on U.S. government
budget deficit and government obligations and liabilities. As a result of the economic circumstances
and current consequences of budget deficit in the United States there have been many controversial
hypotheses of what future may bring to the American people. Therefore, I would like to face deeply
inquire in to of how our countries government deficit and outstanding debt will affect its citizens
and I also assume there are new challenges taking place as the consequence of rising government
debt.
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

Budget Deficit
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 on Helpwriting.net ...
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 wages 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, while

Essay on United States National Deficit
Our National Deficit
The national deficit is the amount of money our government owes, or the difference between the
government expenditure and income. The government comes up with this number by using the
federal budget. This takes the amount of the government's income and subtracts their expenditures
from that particular number. Whatever the total for the day is gets added to the total national debt,
and it builds and grows daily. There is a difference between the national deficit and the national
debt. The national deficit is however much more expenses there were than income for the day. The
national debt is what is carried over from year to year. Our national debt as of November 5, 2005 at
3:35 pm is approximately $8,032,346,276,421 ... Show more content on Helpwriting.net ...
There are several divisions of the deficit. First, there is the difference between the debt the
government owes the public and the debt it owes itself. The public debt is the amount of money the
government borrows from the public, either through taxes or securities. The debt the government
owes itself is in the form of special programs, such as Social Security, or spending in specific areas
like veterans. There are also two types of government expenses. First, there is discretionary, which
the government sets a limit for. Then, there is mandatory, where the government determines who
meets the eligibility for benefits. The national debt began in 1790 with war debts from the
Revolutionary War. Before then, there was no national debt, and after that point the debt has
increased greatly because of more war debt and things such as inflation. The amount of debt
fluctuates year by year. For example, between the years 1977 and 1981, the deficit was below $100
billion. Between 1982 and 1991, the deficit increased to around $425 billion. Over the next few
years, (1992–2001) the deficit dropped back down to below $100 billion, then shot up to about $600
billion between 2002 and 2004. Congress expected there to be a ten year period of surpluses which
led to a tax cut. However, in 2002 there was a recession and the terrorist attacks on September 11
which, together, caused the government to spend more and borrow more boosting the deficit back
up. In

National Debt And Deficit Analysis
The national debt and deficit are not the same, but they do have a direct correlation with each other.
The deficit occurs when the United States government spends more than what they have. In order to
pay off the deficit, the United States government borrows money which then, becomes the national
debt. The United States has many ways to pay off the national debt such as taxes, and Treasury
bonds. They only time that the national debt was completely paid off was in 1837 by President
Andrew Jackson(Smith 1). President Andrew Jackson in 1837 was able to pay off the national debt
by selling land during a real–estate bubble that was occurring in the west(Smith 1). The current
United States debt is about $18.6 trillion, and in order to get this ... Show more content on
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Republicans are against the current Social Security program because they believe "Americans need
greater freedom to arrange personal retirement investments as a supplement to Social Security"
("Republican Views on Social Security"). Democrats, on the other hand, are committed to
preserving Social Security under the idea that the program keeps Americans out of poverty during
retirement. However, the Republican viewpoint is more practical because it offers diverse alternative
fund retirement, which would be a voluntary. Republicans want today's workers to invest their
payroll taxes into personal retirement funds rather than Social Security. By doing so, the Social
Security expenses will fall, and less money will be used to pay out retires workers, so the deficit will
not rise. Democrats must recognize Republican views that Americans cannot rely just on Social
Security because the United States government does not have enough funds for all retirees, and
other options must be explored("Republican Views on Social

Solution Of Debt Crises And Long Term Effects
1. Explanation of Debt Crises and long term effects (10 points) 2. Thorough discussion of budget
deficits and potential solutions (10 points) 3. Thorough discussion of trade deficits and potential
solutions (5 points) 4. Thorough discussion of political obstacles to potential solutions (5 points) 5.
Discussion of solutions impacts on the macro economy (10 points) 6. Spelling, Grammar, and Style
(10 points) The U.S national debt crisis is an issue that must be moderated. In the long term, the debt
crisis could: create budget disorder, compromise national security, and inflate the U.S. dollar. First
of all, budget disorder can happen when interest rate payments on U.S. debt starts to rise above the
... Show more content on Helpwriting.net ...
The government needs to keep paying its mandatory payments, so they need to look to discretionary
spending. Discretionary spending makes up roughly 29 percent of the federal budget. That means
you would have to cut more than a ¼ of all discretionary spending, or roughly ½ of the U.S.
military. This leads to the next possible long term effect of the U.S. debt. Budget disorder is a good
example of how the U.S. could potentially compromise national security due to lack of budgeting. If
the U.S. were to keep up its current budget plans, the country will be craving budget cuts until one
comes. Perhaps the country decides to ignore these cravings for the next 10 years, let's say for
political reasons, that leaves the U.S. in 2026 with an uncontainable desire for budget cuts. In a
perfect world, international affairs would only be lovely, and the U.S. would have no foreign issues
or threats. However, if the country was lead to believe a war was coming, or directly challenged to
war, the U.S. might not be able to afford the proper military training and operation. This can only
happen if the U.S. debt climbs into the deep hole its currently directed in, but it certainly can
happen. Along with national security issues, the economy may suffer as well. An inflated U.S. dollar
is an unavoidable result of continued U.S. debt. It is unlikely the U.S. will make significant cuts to
its defense spending, so the growing interest rates should only dive us deeper into debt. When more

Deficit Spending: the Deficit Good or Bad
Deficit Spending: The Deficit Good or Bad
"Spending financed not by current tax receipts, but by borrowing or drawing upon past tax
reserves." , Is it a good idea? Why does the U.S. run a deficit? Since 1980 the deficit has grown
enormously. Some say its a bad thing, and predict impending doom, others say it is a safe and stable
necessity to maintain a healthy economy. When the U.S. government came into existence and for
about a 150 years thereafter the government managed to keep a balanced budget. The only times a
budget deficit existed during these first 150 years were in times of war or other catastrophic events.
The Government, for instance, generated deficits during the War of 1812, the recession of 1837, the
Civil War, the ... Show more content on Helpwriting.net ...
How could a deficit increase productivity without any cost? The idea of having a balanced budget is
challenged by the ideas of Keynesian Economics.
Keynesian economics is an economic model that predicts in times of low demand and high
unemployment a deficit will not cost anything. Instead a deficit would allow more people to work,
increasing productivity. A deficit does this because it is invested into the economy by government.
For example if the government spends deficit money on new highways, trucking will benefit and
more jobs will be produced. When an economic system is in recession all of its resources are not
being used. For example if the government did not build highways we could not ship goods and
there would be less demand for them. The supply remains low even though we have the ability to
produce more because we cannot ship them. This non–productivity comes at a cost to the whole
economic system. If deficit spending eliminates non–productivity then its direct monetary cost will
be offset if not surpassed by increased productivity. For example in the 1980's when the huge
deficits were adding up the actual additions to the public capital or increased productivity were often
as big, or bigger than the deficit. This means as long as the government spends the money it gains
from a deficit on assets that increase its wealth and productivity, the debt actually benefits the
economy. But, what if the government spends money on programs that
do

Federal Debt and Deficit: the Solutions
The historical federal spending of the government has already done significant damage to America;
spending habits have increased the federal budget deficit at alarming rates adding $2.7 trillion to the
national debt in two years, $1.4 trillion in the 2009 fiscal year and $1.3 trillion in 2010.
(Montgomery) These deficits are largely caused by increases in spending rates. The current Obama
Administration has used the recession in their favor to expand both the government and spending.
America has not seen deficits of this nature since World War II with spending levels reaching 25%
of the GDP and deficits reaching 10% of the GDP. And, even when this recession comes to an end,
estimates show that annual deficits will continue to surpass ... Show more content on
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The Obama Administration alone has added billions in new federal spending and though their aim
was to improve the economy, their recessionary spending has done nothing but add to the deficit. In
addition to cutting administration spending and enacting spending caps, programs like Medicare,
Medicaid, and Social Security, which are responsible for a large dent in the deficit, need to be
reformed. While still offering all of these programs, the government needs to find new ways to offer
them without putting the country into even more debt on an annual basis; controlling entitlement
programs would have a positive effect on the national deficit. Lastly, cutting military expenses and
getting troops out of other countries.
Solutions
This section illustrates how a reduction in spending could eliminate the federal budget deficit over
10 years. It shows projections of revenues and spending as a share of GDP based on the March 2011
Congressional Budget Office estimates. My projections for revenues assume the extension of the
2001 and 2003 income tax cuts, extension of alternative minimum tax relief, and repeal of the tax
increases

When ‘Deficit’ Isn’t a Dirty Word by Robert H. Frank
On March 22, 2009 Cornell University's economist Robert H. Frank wrote an article in The New
York Times titled, "When 'Deficit' Isn't a Dirty Word," in which he argued that it is essential to
separate the budgets cyclical components from its path in the long run and then make smart
decisions in how the money is spent. I actually agree with what Frank is saying and believe that we
should apply short–run deficits to help end economic downturns. He begins with the question, "ARE
you confused about whether large federal budget deficits matter?" Robert H. Frank uses his article to
clarify to the audience that deficits can actually be utilized to help the economy if used in the right
ways. It's obviously expensive to run such a superpower like the United States of America and as a
result, deficits and debts are encountered. In simple terms, a federal deficit is when the government
is spending more or outlays more than it is taking in revenue and national debt is the result of the
federal government borrowing money to cover all of the years of budget deficits. People, such as
Harvard economist, Martin Feldstein, have argued that failure to run large deficits could prolong
economic downturn; however, most who have studied the issue possess a general consensus that
"short–run deficits help end recessions, and that whether long–run deficits matter depends entirely
on how the government spends the borrowed money."
Frank offers an example from the past to prove his point. In 1929,

The American Economy : Public Policy, National Deficit,...
The United States economy is an incredibly complicated entity that is intricately tied to the
government. In a time where the national debt is equals almost twenty trillion dollars, it's important
to understand both how the American economy works and the economic policies surrounding it.
One of the first things to be acquainted with when studying the American economy is the term
public policy. Public policy is defined as a "system of laws, regulatory measures, courses of action,
and funding priorities concerning a given topic promulgated by a governmental entity or its
representatives" (Norwhich University, 2016). Economic policy is one of the most discussed forms
of public policy, and like the national debt, is shrouded in controversy. Contrary to some beliefs, the
problem of the national debt is not unsolvable, but it will require time and planning to fix. This
paper will attempt to explain concepts relating to the American economy such as public policy,
national deficit, debt, as well theories the that could be used to remedy some of these issues. One
common myth concerning economics is that national deficit and debt are the same thing. In reality,
these two things are two different concepts entirely. Deficit is defined as the difference between
what the government takes in and what it spends. The deficit, ".... is very similar to a long–term
loan, but on a much larger scale" (Investopedia, 2008). An interesting fact is that currently, the
deficit in America is actually

Deficit Spending After World War II

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Deficit Spending After World War II