Transcript Aim: How does the budget deficit and national debt influence our

Do Now:
What is a budget?

Budget
President
 Congress
 Revenues (taxes)
 Expenditures (spending/appropriations)
 Categories of spending (Big 3)

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Budget deficit

Define

Budget Surplus?
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National Debt


Define –
18 trillion dollars
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Interest Payments on the Debt



part of the budget
Grows as the debt grows
7% of budget due to low interest rates
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Effects of National Debt



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Crowding out (?)
Increase total demand ofr goods/services
(inflation)
Interest payments on debt
Foreign owned portion
1.
2.
3.
4.
Define Budget.
What is our federal government’s major
source of revenue?
What is meant by expenditure?
What are the 3 biggest categories of federal
spending?



When government expenditures exceed
revenue a ________ has occurred.
When government revenues exceed
expenditures a _________has occurred.
The accumulated borrowing the federal
government engages to finance its budget
deficits is the ________________.


What is the current level of the U.S. national
debt?
What are some negative effects of a large
national debt?

Do Now:

What is a budget deficit?

What is the national debt?

Cut Spending?

Which areas?

Negative effects?
Politicians?


Raise Taxes



For whom?
How much?
Negative effects

Balanced Budget Amendment

Define

difficulties?

Good for the economy?

Demand-Side Theory



Keynesian Economics
Deficit spending to stimulate the economy during
a recession/contraction
Democrats favor this theory

Supply-Side theory
Across the board tax cuts
 Individuals and corporations
 “trickle down” economics
 Stimulate the economy
 Reaganomics
 Favored by Republicans


Other concerns

Can we afford our debt?

Debt as a percentage of GDP

Foreign owned portion of the debt

Does the problem of budget deficits
and national debt need to be solved
for? Explain.