The Debt Crisis. Key things to know What is the national debt? the sum of all federal bills, notes and bonds that have been issued by the Treasury and.

Slides:

Advertisements

Similar presentations

National Debt. Budget Deficit – The amount by which expenditures exceed revenues (G>T) - $186.5 Billion (2007) Budget Surplus – The amount by which revenues.

Advertisements

Debt and Deficits in the face of Baby Boom Retirement Winter 2006 Economics 102.

Does the U.S really have a debt crisis? wgbh/pages/frontlin e/tentrillion/view/

America’s National Debt and Long-Term Outlook An Overview of the Challenge and the Implications for Young People March 2009.

Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved National Debt and Economic Growth See: DeLong/Olney: Macroeconomics; McGraw-Hill;

DEFICITS AND DEBT DEFINITIONS DEFICIT – ANNUAL AMOUNT THAT GOVERNMENT BORROWS (SIMILAR TO WHAT PUT ON CREDIT CARD IN A YEAR) DEBT – TOTAL AMOUNT OF BORROWING.

Deficits and Debt. The Budget Process Taxes, especially personal income taxes, provide most of the federal government’s revenue.  The federal budget.

Module 30: Long-run Implications of Fiscal Policy:

AP Economics Mr. Bordelon

1 America’s National Debt. 2 Important Concepts What’s the difference between deficits and debt? Deficits: The annual imbalance between revenues and spending.

US Fiscal Policy Challenges to a Sustainable Fiscal Future March 2010.

McGraw-Hill/Irwin Copyright  2008 by The McGraw-Hill Companies, Inc. All rights reserved. Federal Budget Deficits, Surpluses, and the National Debt 15-1.

National Debt. What do we owe? April 2015 National Debt has reached $18.2 trillion Average of: $56,728 per person Average of: $154,161 per tax payer.

TAX BASES & STRUCTURES. Most Common Tax Bases Individual income tax Corporate income tax Sales tax Property tax.

“In the middle of a recession, where we're just climbing out of it, where the economy -unemployment is still at 9.7 percent, the idea of raising taxes.

1 Federal Deficits, Surpluses and the National Debt Economics for Today by Irvin Tucker, 6 th edition ©2009 South-Western College Publishing.

 The government generally spends more than it gets in revenue  When expenditures > revenue: budget deficit  If, however, expenditures = revenue, government.

--- US Federal Government Fiscal Deficits began to grow in During 2000s C and G increased, now it must be I and NX increasing --- Need to Rebalance.

--- US Federal Government Fiscal Deficits began to grow in During 2000s C and G increased, now it must be I and NX increasing --- Need to Rebalance.

JANUARY 9, 2014 Economic Policy. Fiscal Policy Spending and taxing decisions made by the government The annual federal budget is the basis of fiscal policy.

Review Medicare: --Health care for those over age 65 Medicaid: --Health care for the poor Social Security: --pension money for those who retire --unemployment.

What it is and from where it came..  Grade 9 Economics  D  H  J  L  E.

Presidential Budget  What is the difference between the deficit and the debt?  Deficit: annual gap between what the government collects (tax revenues),

Federal Revenue and Spending: A Book of Charts Rea Hederman, Michelle Muccio, and Alison Acosta Fraser The Heritage Foundation.

Government Budget Do Deficits & Debt Matter?. Federal Gov’t Taxes Federal Income Tax –Progressive Tax: tax rate increases as income increases Social Security.

Fiscal Policy If your family or you made a budget to calculate family expenses than you are practicing a key IDEA that is related to Fiscal Policy = Balancing.

Warm-up 5/10/12  Yesterday we talked about welfare programs to help people in need. How does the government pay for these programs?  What limits how.

National Debt v. Budget Deficit. Government Spending Vocab terms related to National Debt & Budget Deficit Revenue = money collected by the government.

The National Debt Mr. Seely Economics. Balancing the Budget Balanced Budget- a budget in which total revenues are equal to total spending. Budget Surplus-

Deficit vs. Debt Deficit: how much more Government spends than it receives in tax revenue over 1- year Debt: total amount Government owes (has borrowed.

1 Chapter 17 Federal Deficits, Surpluses, and the National Debt Key Concepts Key Concepts Summary Practice Quiz ©2004 Thomson/South-Western.

Facing America’s Long-Term Budget Challenges Brian Riedl Grover M. Hermann Fellow for Federal Budgetary Affairs The Heritage Foundation.

Economic Activity in a Changing World Chapter 3 pp

Chapter 18 Deficits, Surpluses, and the Public Debt.

Group 2 Chih-Mei Shen & Nancy Briana Lόpez Hodgson.

Growing National Debt Should we be worried?. Federal Deficit Federal Debt Leads to a larger $16.7 Trillion.

1 Chapter 23 Federal Deficits and the National Debt Key Concepts Key Concepts Summary Practice Quiz Internet Exercises Internet Exercises ©2002 South-Western.

Longwood University Personal Finance Scott Wentland Longwood University 201 High Street Farmville, VA

1. What is the national debt? 2. What caused the national debt? 3. Where does the government get the money when it wants to spend more than it takes in?

The Economy Ms. Dennis & Mr. Patten Participation in Government.

Fiscal Policy Use of government spending and revenue collection to influence the economy.

Economics Unit 4 Lesson 4 Understanding Government Budgets.

Fiscal Policy, Deficits, and Debt Chapter 13 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior.

U.S. Government Budget Why can’t we balance it?.

Ch. 25 Section 3 Managing the Economy. Surpluses and Deficits Budgets are built on forecasts or predictions of the future Budgets are built on forecasts.

Chapter 3 Key Terms. Gross Domestic Product (GDP) The total value of the goods and services produced in a country in a given year.

Debt The National Debt is the total amount of money we owe to countries and people we have borrowed from – How do we borrow? – Treasury Bonds.

Fiscal Policy, Deficits, and Debt Chapter 31 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior.

Transparency 16-1 What Are the Major Federal Taxes? Personal income tax Corporate income tax Social security tax.

BASIC ECONOMICS FOR THE CITIZEN. The ECONOMY - a system by which goods and services are produced, sold, and bought in a country or region. The ECONOMY.

Fiscal Policy Using taxes and government spending to influence the economy.

Should We Worry About the National Debt? Economics Chapter 14.

CH 10, Section 3: Balanced budget amendment

BORROWING MONEY AND PUBLIC DEBT. HOW DOES THE GOVERNMENT BORROW MONEY?  Article 1, Section 8, Clause 2 gives congress the power to “borrow money on the.

McGraw-Hill/Irwin Chapter 15: Fiscal Policy, Deficits, and Debt Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Reaganomics = supply side/trickle down economics Cut taxes, especially for the wealthy and big business. Cut govt spending. No govt deficit. Keynesian.

CH. 14: THE CONGRESS THE PRESIDENT AND THE BUDGET.

Deficits, Surpluses, and the National Debt Please listen to the audio as you work through the slides.

Chapter 12 “Fiscal Policy”. Fiscal policy Changes in taxes and government spending designed to affect Aggregate Demand.

Our National Debt What is our current national debt? How did we get into this situation? What can be done to solve this problem?

Facing America’s Long-Term Budget Challenges Brian Riedl Grover M. Hermann Fellow for Federal Budgetary Affairs The Heritage Foundation June 19, 2006.

1 Federal Deficits, Surpluses and the National Debt ©2006 South-Western College Publishing.

Deficits & National Debt Mr. Marinello * Chippewa Valley.

Deficits, Surpluses, and the National Debt

Deficits and the Debt GOVT Module 16.

Taxes & Government Budget

Deficits and the Debt November 28, 2017.

The National Debt and Deficits

U.S. Government Budget Why can’t we balance it?.

Deficits & National Debt

Presentation transcript:

The Debt Crisis

Key things to know What is the national debt? the sum of all federal bills, notes and bonds that have been issued by the Treasury and not yet redeemed-what we owe What is the difference between the debt and deficit? Debt is the cumulative total owed, deficit is the difference between revenues collected (taxes) and expenditures What is intra-governmental debt? Debt that the government owes to itself-mainly the Social Security trust fund

Key things to know continued What is the total amount owed? $14.6 trillion or $14,600,000,000,000 Who do we owe it to? Social Security trust fund $4.7 trillion Other countries, individuals, retirement funds, businesses When do we have to pay it back? We pay it off over time and pay interest often borrowing and paying at the same time

So what’s the problem? The debt is currently about equal to our annual GDP of $15 trillion, but it is rising faster than economic growth. As the debt rises, more of our revenue goes to pay interest on the debt. Current rate of spending, especially because of entitlement programs is not sustainable.

Cyclical debt: due to the downturn in the business cycle Lower tax revenues Increased spending to stimulate the economy Structural debt Rising costs of Medicare and Medicaid due to increased health care costs and aging population Rising cost of Social Security as baby boomers retire

Chart below does not include intra-governmental debt

How do we compare to other countries?

What do we spend money on? t t

Ratio of Current Budget

How did we get here? Bigger government New programs, new priorities, Homeland Security Afghanistan and Iraq Wars fought on credit Tax Cuts during Bush years extended by Obama Demographic time-bomb Medicare and Social Security Great Recession

What are the options? Reduce spending Increase revenues (taxes) Grow the economy Some combination of the above