Essay on Reducing the National Deficit - 1071 Words

Reducing the National Deficit Many United States citizens are unaware of the countrys current financial state. Many assume that one of the worlds 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†¦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 1960s 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 nations debt. When the Gulf War began the early 1990s, 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 governments 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 nations citizens. The combination of these amounts is what makes up the nationalShow MoreRelatedFederal 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 MoreFederal Deficit And The National Debt1661 Words   |  7 Pagesyears 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 differentRead MoreFiscal Policy1391 Words   |  6 PagesFiscal Policy The people of the United States are by the fiscal policies. Team C will address the how and why the U. S. budget deficits, budget surpluses, and debt affect different individuals and institutions. There is a wide array of individuals affected by fiscal policy, which include tax payers, future Social Security and Medicaid users. The unemployed individuals and University of Phoenix students will be affected by fiscal policy. 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The budget deficit increases the gap between country’s national savings and national income and and also widens the deficit in the current account by necessitating the countryRead MoreDiscuss the Ways in Which the Government May Use Fiscal Policy to Help the Economy Grow Out of a Recession1076 Words   |  5 Pagesindirect taxation and the budget balance can be used â€Å"counter-cyclically† to help smooth out some of the volatility of national output particularly when the economy has experienced an external shock and is in a recession. The Keynesian school argues that fiscal policy can have powerful effects on demand, output and emplo yment when the economy is operating below full capacity national output, and where there is a need to provide a demand-stimulus. Monetarist economists believe that government spendingRead MoreExpanding Social Security Spending In recent decades, entitlement programs have constituted a600 Words   |  3 Pagesexpenditures were $1.3 trillion, 8.4% of the $16.3 trillion GNP (SSA.gov). There has been an issue in the White House of either opposing the cut in Social Security spending or advocating for a hike in payments. Expanding Social Security instead of reducing it would benefit seniors, especially considering America’s struggling middle class and that there are more impoverished people than ever before. Despite the retirement income crisis, Social Security should be expanded, not reduced. In Arthur Delaney’sRead MoreBalanced Budget Amendment1341 Words   |  6 PagesLegislative and the Executive Branches have done nothing to lessen this deficit. One idea that has been discussed not only in Congress, but on prime time news networks is the passage of a Balanced Budget Amendment. A Balance Budget Amendment (as recently seen in House Bill HJR2, 28 NOV 2011) would require that Congress balance its budget every fiscal year unless a three-fifths majority of both houses approved of maintaining a deficit[1]. In a CNN Poll, conducted by ORC International, 74% of AmericansRead MoreEvaluate the case for cutting public expenditure rather than raising taxes as a means of reducing fiscal deficits.890 Words   |  4 Pagesthe case for cutting public expenditure rather than raising taxes as a means of reducing fiscal deficits. [30] A fiscal deficit is when a governments total expenditures exceed the tax revenues that it generates. A budget deficit can be cut by either reducing public expenditure or raising taxes. In this essay, I am going to analyse the benefits and costs of increasing tax rates to reduce fiscal deficits instead of cutting government expenditure. First of all, if the government