1. National Debt v. Budget Deficit

2. Government Spending Vocab terms related to National Debt & Budget Deficit Revenue = money collected by the government – taxed and nontaxed Expenditure = money spent by the government

3. Budget Deficit (Federal) Budget = a written document outlining the spending plan for the fiscal year. Budget Deficit = occurs in any year when expenditures exceed revenue Meaning the government spent more than it took in The gov’t borrows money to payoff the yearly deficit We then have to pay back that money along with interest Causing the debt to grow larger Goal is to have a “balanced” budget or budget surplus Balanced Budget = when you break even, or spend only what you take in Budget Surplus = When there is money left over! This does happen…

4. National Debt National Debt =All of the money the gov’t owes to its bondholders The bondholders are the ones who lent the gov’t money to pay off the deficit Whenever the country has a budget deficit, they BORROW money to cover the cost This borrowed money rolls over from year to year adding to the growing National Debt National Debt is currently approaching $17 TRILLION

5. National Debt 2008 Deficit 2010 Deficit 2011 Deficit 2009 Deficit

6. What causes the debt? Good Debt v. Bad Debt Mandatory Spending = spending that is required by law or policies. (which includes payments on debt) Entitlement Programs = social welfare programs Health Medicare Medicaid Social Security Some Education Some Defense http://www.concordcoalition.org/learn/budget/federal- budget-pie-charts http://www.concordcoalition.org/learn/budget/federal- budget-pie-charts

7. What causes debt? Discretionary Spending = allows the government to make choices on where the money is spent Law enforcement Education Defense Disaster Aid Transportation Land and parks State assistance

8. Mandatory v. Discretionary

9. Real time http://www.usdebtclock.org/