National Debt Economics

Budget Deficit

budget deficit is the difference between what the federal government spends (called outlays) and what it takes in (called revenue or receipts) in one year.

What is the difference between budget deficit and national debt?

budget deficit is the difference between what the federal government spends (called outlays) and what it takes in (called revenue or receipts) in one year. The National debt is the result of the federal government borrowing money to cover years and years of budget deficits.

Deficit

spending more than the amount of revenue (money) you take in

Discretionary Spending

spending that Congress decides on each year (national defense, traffic control, national parks)

Mandatory spending

spending that is required by law (Social Security, Medicare, welfare, veteran and disabled benefits)

National Debt

the total amount of money that a country's government has borrowed over time (combined over many years) currently the US National Debt is over $20 Trillion.

Fiscal Policy

the use of government spending and revenue collection to influence the economy

What does not go into GDP

used goods, non-market activity or illegal activities, Transfers or Financial Gifts (gift or exchange of paper assets), Intermediate goods (goods used to produce other goods for final sale)

GDP Per Capita

value of GDP divided by population

Surplus

Taking in more revenue (money) than you spend.

What is the trend in our national debt?

The National debt keep growing and has grown at a much faster rate in the 2000s

Budget

A plan for spending

Who lends the US money (in order)

Domestic Private investors, Federal Reserve, State and local governments, China, Japan, Brazil, UK (United Kingdom),

What is the difference between GDP & GNP?

GDP is the market value of everything produced within a country; GNP is the value of what's produced by a country's residents, no matter where they live.

How does GDP relate to National Debt?

GDP is the total of all goods and services produced (income) and National Debt is what we owe (expense)

GDP

Gross Domestic Product, GDP The value of goods and services produced WITHIN a country in a given amount of time (usually 1 year)

GNP

Gross National Product, GNP is total value of all the final products and services produced in a given period by the means of production owned by a country's residents.

What is the trend in our national debt as a percentage of GDP?

Our national debt as a percentage of GDP is 106.1 in the year 2016, however the trend shows a significant trend upward since 2007. In 2007, the national debt as a percentage of GDP was 62.5 and has grown to 106.1 in the year 2016.

Appropriations bill

a bill that authorizes a specific amount of spending by the government.

Federal budget

a written document estimating the federal government's revenue and authorizing its spending for the coming year

Debt Ceiling

an upper limit set on the amount of money that a government may borrow.

Fiscal year

any 12 month period used for budgeting purposes

What goes into GDP

consumer spending (in that year on finished, new goods), business investment, Government purchases, net exports (Exports minus Imports) FOR ONE YEAR!