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

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Group 2 Chih-Mei Shen & Nancy Briana Lόpez Hodgson

United States GDP v.s. Government debt

Definition FISCAL DEFICIT: When a government's total expenditures exceed the revenue that it generates (excluding money from borrowings). Deficit differs from debt, which is an accumulation of yearly deficits. debt: In the United States, government debt refers to federal debt held by individuals, corporations, state or local governments, foreign governments, and other entities outside of the United States Government less Federal Financing Bank securities. 3

Debt v.s Budget 4

What happened in 2008~ Financial crisis in 2008 Severe drop in economic activity Stimulate policy: QE(Quantitative easing) Outcome : sharply reduced federal revenues and increased spending

2014~ Treasury Department figures released showed: Income- tax revenue from individuals is up about 12 percent, while receipts from companies are up 8.7 percent

However… aging of the population and rising health care costs interest rates 7

8 What would it happen after 2016

Conclusion Spending cut Revenue increasing DO IT QUICKLY 9

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