What is the National Debt? The United States government usually spends (expenditures) more than it makes (revenue) every year. This is known as deficit.

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Presentation transcript:

What is the National Debt? The United States government usually spends (expenditures) more than it makes (revenue) every year. This is known as deficit spending. Continual deficit spending over the years has led to a debt we owe. Who do we owe? Who did we borrow from? 53% to ourselves; 47% to foreign investors

U.S. CONSTITUTION ARTICLE 1 SECTION. 8. The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States; To borrow Money on the credit of the United States;

The 14 th Amendment SECTION. 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

QUOTES FROM THE FRAMERS “I sincerely believe that banking institutions are more dangerous than standing armies; and that the principle of spending money to be paid by posterity... is but swindling futurity on a large scale.” Thomas Jefferson “I place economy among the first and most important of virtues, and public debt as the greatest of dangers to be feared.” “To preserve our independence we must not let our leaders load us with perpetual debt. ….If we can prevent the government from wasting the labours of the people under the pretence of caring for them, we will be wise.” Thomas Jefferson

More Quotes "No pecuniary consideration is more urgent, than the regular redemption and discharge of the public debt: on none can delay be more injurious, or an economy of time more valuable.” George Washington “Allow a government to decline paying its debts and you overthrow all public morality--you unhinge all the principles that preserve the limits of free constitutions. Nothing can more affect national prosperity than a constant and systematic attention to extinguish the present debt and to avoid as much as possibly the incurring of any new debt.” Alexander Hamilton "There are two ways to enslave a nation. One is by the sword. The other is by debt.” John Adams

History of the National Debt The first national debt was the result of the American Revolution and the weakness of the Articles of Confederation The first yearly reported debt was reported in $75,463, Andrew Jackson ( ) was the first President to remove the national debt (There was a depression in 1837 when his successor- Van Buren- took over)

More History The National Debt grew tremendously as a result of these events: Civil War- 1863= first time $1 billion WWI- 1918= $25.5 billion Depression/“New Deal”- 1936= $33.7 billion WWII- 1943= $201 billion **Over the years some Presidents have removed all the debt and some have reduced it.

Modern History $997 billion first time $1 trillion (what is a trillion?) stayed in the $5 trillion area It has climbed steadily ever since: $8.2 trillion $8.8 trillion $9.3 trillion $11.1 trillion $12.8 trillion $14.5 trillion

Interesting Facts Remember deficit spending? 2000 was the last year we actually had a budget surplus- $230 billion we were $1.4 trillion over budget Summer of political fight over raising the debt ceiling These Presidents added/are adding these amounts to the National Debt: Clinton- $547 million per day Bush (W.)- $1.6 billion per day Obama- $4.1 billion per day

The Worst Part? Almost 10% of our yearly U.S. Budget is used to pay off interest (alone) on the debt (that is 10 cents out of every budget dollar) How do we stop this? Spend less? Tax more? No wars? Can our government keep doing this? Is this spending scenario- sustainable? The 10 year projection for our national debt (if the situation doesn’t change)- $23 trillion Who will end up bearing the burden?