1. Aim: How does the budget deficit and national debt influence our economy
Do Now:
What is a budget?

2. Aim: How does the budget deficit and national debt influence our economy?
President
Congress
Revenues (taxes)
Expenditures (spending/appropriations)
Categories of spending (Big 3)

3. Aim: How does the budget deficit and national debt influence our economy?
Define
Budget Surplus?

4. Aim: How does the budget deficit and national debt influence our economy?
Define –
18 trillion dollars

5. Interest Payments on the Debt
Aim: How does the budget deficit and national debt influence our economy?
Interest Payments on the Debt
part of the budget
Grows as the debt grows
7% of budget due to low interest rates

6. Effects of National Debt
Aim: How does the budget deficit and national debt influence our economy?
Effects of National Debt
Crowding out (?)
Increase total demand ofr goods/services (inflation)
Interest payments on debt
Foreign owned portion

7. Summary: Budget Deficit and National Debt
Define Budget.
What is our federal government’s major source of revenue?
What is meant by expenditure?
What are the 3 biggest categories of federal spending?

8. Summary: Budget Deficit and National Debt
When government expenditures exceed revenue a ________ has occurred.
When government revenues exceed expenditures a _________has occurred.
The accumulated borrowing the federal government engages to finance its budget deficits is the ________________.

9. Aim: How does the budget deficit and national debt influence our economy?
What is the current level of the U.S. national debt?
What are some negative effects of a large national debt?

10. Aim: How should the problem of budget deficits and the national debt be dealt with?
Do Now:
What is a budget deficit?
What is the national debt?

11. Aim: How should the problem of budget deficits and the national debt be dealt with?
Cut Spending?
Which areas?
Negative effects?
Politicians?

12. Aim: How should the problem of budget deficits and the national debt be dealt with?
Raise Taxes
For whom?
How much?
Negative effects

13. Aim: How should the problem of budget deficits and the national debt be dealt with?
Balanced Budget Amendment
Define
difficulties?
Good for the economy?

14. Aim: How should the problem of budget deficits and the national debt be dealt with?
Demand-Side Theory
Keynesian Economics
Deficit spending to stimulate the economy during a recession/contraction
Democrats favor this theory

15. Aim: How should the problem of budget deficits and the national debt be dealt with?
Supply-Side theory
Across the board tax cuts
Individuals and corporations
“trickle down” economics
Stimulate the economy
Reaganomics
Favored by Republicans

16. Aim: How should the problem of budget deficits and the national debt be dealt with?
Other concerns
Can we afford our debt?
Debt as a percentage of GDP
Foreign owned portion of the debt

17. Aim: How should the problem of budget deficits and the national debt be dealt with?
Does the problem of budget deficits and national debt need to be solved for? Explain.