Download Debt Terms and Concepts

Debt Terms
Debt—something that is
owed or bound to pay (US
is 19. trillion)
GDP—gross domestic
product. How much money
a country makes per yr. (US
is 15.9 trillion)
Deficit—the amount by
which a sum of money is
negative. If we have 100
dollars, and spend 150, we
have a deficit of 50. Doing
this for 3 years would give
us a “debt” of 150.
Federal Reserve—the
central bank of the United
States. Janet Yellen is the
current chairperson.
Supposed to control and
stabilize US economy by
printing/not printing
money, and
raising/lowering interest
rates.
Bretton Woods System—
“gold standard” left by the
US in 1971. We now print
money without being
backed by gold.
Inflation—when prices
increase when the value of
money decreases. The
more money in circulation,
the less it is worth.
Entitlements—the amount
of which the person has a
right to. In case of the US,
social security, medicare
Medicaid. (FDR and LBJ)
Social Security—federal
insurance program that
provides benefits to
unemployed, disabled,
injured. Retirement age
currently 65. Age set in
1930’s when life
expectance was 67. Life
expectancy is near 80 now.
Medicare—federal
insurance program
controlled by states. Does
medical insurance for
people above 65, last stage
of diseases, disabled people.
Medicaid—Insurance for
poor people/low income
families. Parents with
disabled children.
Regressive Tax—tax the
poor more
Progressive Tax—tax the
rich more
Sales Tax—a tax on
sales/receipts on sales.
Ohio is 7.0%. Anything you
buy but food.
Income Tax—a tax levied
directly on a person’s
income. Roughly 25%-33%
for most people. Taxed
differently for every 10,000
earned.
Corporate Tax—Separate
tax on corporations.
Highest 38% that make 15
million or more. Taxes go
up as income from
corporation does. Is the
US’s too high or too low?
Flat Tax—Everyone pays
the same tax rate.
Value Added Tax (VAT)—a
tax applied through every
part of the production, and
added on at the end to the
consumer.
Regressive Tax—tax the
poor more
Progressive Tax—tax the
rich more
Simpson and Bowles—
national committee on
fiscal responsibility and
performance. Came up
with plan recently.
Standard and Poor—stock
market entity on top 500
companies.
Moody’s—creates interest
rates/credit grades from
countries ranging from
AAA+ to CCC (Greece)
Monetary Policy: Done by
the Federal Reserve.
Printing of money, and
controlling of interest rates.
Fiscal Policy: Controlled by
Congress. Essentially
taxing and spending.
Ayn Rand
Ron Paul
Paul Ryan