Download The National Debt

The National Debt
The Budget
Balanced Budget: revenues are equal
to spending
Budget surplus: the government takes
in more than it spends
Budget deficit: where the government
spends more than it takes in.
Ways the government reacts to a
deficit:
1. Create more money.
Just print more of it. Downside: can
create hyperinflation
2. Borrow more money
by selling Treasury Bills (repaid in 3
months to a year), Treasury Notes
(repaid in two to ten years), Treasury
Bonds (paid back in 30 years)
National Debt Vs. National Deficit
National Debt: Total of all money owed to
bondholders
The debt is ALL the money owed for all time, but
the deficit : when spending exceeds revenue in
one year
Example: if the debt was $100 at the start of the
year and the government has revenues of $20 in
the year and spends $35
the deficit is 35 – 20 = $15
the new debt is $100 + $15 = $115
Two problems of the national debt:
-the crowding out effect, which means that
because the government has borrowed so
much money, there isn’t enough money
available for businesses to borrow money.
-servicing the debt which means to pay the
interest on the debt, which takes away money
available for other programs like health care,
defense or roads
Who owns the US debt?
Hong Kong: $121.9 billion (0.9 percent)
Caribbean banking centers: $148.3 (1 percent)
Taiwan: $153.4 billion (1.1 percent)
Brazil: $211.4 billion (1.5 percent)
Oil exporting countries: $229.8 billion (1.6 percent)
Mutual funds: $300.5 billion (2 percent)
Commercial banks: $301.8 billion (2.1 percent)
State, local and federal retirement funds: $320.9 billion (2.2 percent)
Money market mutual funds: $337.7 billion (2.4 percent)
United Kingdom: $346.5 billion (2.4 percent)
Private pension funds: $504.7 billion (3.5 percent)
State and local governments: $506.1 billion (3.5 percent)
Japan: $912.4 billion (6.4 percent)
U.S. households: $959.4 billion (6.6 percent)
China: $1.16 trillion (8 percent)
The U.S. Treasury: $1.63 trillion (11.3 percent)
Social Security trust fund: $2.67 trillion (19 percent)
Budget the last 20 years
In the mid 1990’s an effort was taken to make
a Balanced Budget Amendment. However, it
did not pass because it would not be flexible
enough to deal with rapid changes in the
economy.
In 2000 we had the first surplus in thirty years
and President Bush even sent tax rebate
checks to tax payers
Debt by President
2012 gdp $15.2T
Current Debt Numbers
U.S. NATIONAL DEBT CLOCK The Outstanding
Public Debt as of 04 Dec
$16,344,322,925,999
so each citizen's share of this debt is $51.906.
Debt clock