deficits and the debt: an example. year taxes spending deficit/surplus debt 1 25m 25m 0 0 2 27m 30m...
TRANSCRIPT
Deficits and The Debt: An example.
Year Taxes Spending Deficit/Surplus Debt
1 25M 25M 0 02 27M 30M -3M 3M3 30M 35M -5M 8M4 33M 32M 1M 7M
Some Numbers for the US
• FY2010• October 1, 2009 through September 30, 2010.• Receipts = $2,165 billion• Outlays = $3,721 billion• Deficit = $1,556 billion
• Source: Office of Management and Budget• http://www.whitehouse.gov/omb/
As a percent of GDP
• FY2010• Receipts = 14.8%• Outlays =25.4%• Deficit = 10.6%
• Note: GDP = $14, 624 billion
US Debt
• http://www.treasurydirect.gov/NP/BPDLogin?application=np
• $9,059 billion, which is about 62% of GDP.
The U.S. government debt
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The debt of the U.S. federal government, expressed here as a percentage of GDP, has varied throughout history. Wartime spending is typically associated with substantial increases in government debt.
• Large increase in government debt– Cannot be explained by war– Around 1980– President Ronald Reagan, 1981
• Committed to smaller government and lower taxes• Cutting government spending - more difficult politically
than cutting taxes
– Period of large budget deficits– Government debt: 26% of GDP in 1980 to 50% of
GDP in 1993
The history of U.S. government debt
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• President Bill Clinton, 1993– Major goal - deficit reduction– And Republicans took control of Congress, 1995
• Deficit reduction
– Substantially reduced the size of the government budget deficit
– Eventually: surplus– By the late 1990s - debt-GDP ratio - declining
The history of U.S. government debt
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• President George W. Bush – Debt-GDP ratio - started rising again– Budget deficit
• Several major tax cuts• 2001 recession - decreased tax revenue and increased
government spending• War on terrorism - increases in government spending
The history of U.S. government debt
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