Federal Budget Deficit Economics
Economics for Strategic Decisions
U.S. Federal Budget Deficit
Introduction and History
The U.S. Federal Budget deficit is the fiscal year difference between what the United States Government takes in from taxes and other revenues, called receipts, and the amount of money the government spends, called outlays. The items included in the deficit are considered either on budget or off budget. Generally, on-budget outlays tend to exceed on-budget receipts, while off-budget receipts tend to exceed off-budget outlays. The United States public debt, commonly called the national debt, gross federal debt or U.S. government debt, grows as the U.S. Federal Budget remains in deficit and is the amount of money owed by the United States government …show more content…
As of April 18th, 2006, the total U.S. government debt was $8.395724 trillion. The United States has had public debt since its inception. Debts incurred during the American Revolutionary War and under the Articles of Confederation led to the first yearly reported value of $75,463,476.52 on January 1, 1791. Over the following 45 years, the debt grew and then contracted to nearly zero in late 1834. On January 1, 1835, the national debt was only $33,733.05, but it quickly grew into the millions again. The first dramatic growth spurt of the debt occurred because of the Civil War. The debt was just $65 million dollars in 1860, but passed $1 billion in 1863 and had reached $2.7 billion following the war. The debt slowly fluctuated for the rest of the century, finally growing steadily in the 1910s and early 1920s to roughly $22 billion as the country paid for involvement in World War I. The buildup and involvement in World War II brought the debt up another order of magnitude from $43 billion in 1940 to $260 billion following the war. After this period, the debt's growth closely matched the rate of inflation until the 1980s, when it again began to skyrocket. The public debt briefly started to go down in 2000 …show more content…
Of the three, the last one may be the most susceptible to the influence of policymakers. The larger the capital stock, the more productive the labor force tends to be.
While it may be possible for fiscal policy to have an effect on the rate of technological progress in the way public money is spent, it probably has a much larger effect on growth through its influence on the size of the domestic stock of capital and the amount of capital available to each worker in the labor force. The total value of national output can be measured in two ways. Either the total value of the goods and services produced can be added up, or the total value of the incomes resulting from that production can be counted.
The measure of total output based on the value of production is typically subdivided into several categories of demand. Specifically, it is calculated as the sum of consumption spending (C), investment (I), government spending (G) and the difference between exports (X) and imports (M):
GDP = C + I + G + (X - M) The alternative measure of total output is the sum of the various uses to
U.S. Federal Budget Deficit
Introduction and History
The U.S. Federal Budget deficit is the fiscal year difference between what the United States Government takes in from taxes and other revenues, called receipts, and the amount of money the government spends, called outlays. The items included in the deficit are considered either on budget or off budget. Generally, on-budget outlays tend to exceed on-budget receipts, while off-budget receipts tend to exceed off-budget outlays. The United States public debt, commonly called the national debt, gross federal debt or U.S. government debt, grows as the U.S. Federal Budget remains in deficit and is the amount of money owed by the United States government …show more content…
As of April 18th, 2006, the total U.S. government debt was $8.395724 trillion. The United States has had public debt since its inception. Debts incurred during the American Revolutionary War and under the Articles of Confederation led to the first yearly reported value of $75,463,476.52 on January 1, 1791. Over the following 45 years, the debt grew and then contracted to nearly zero in late 1834. On January 1, 1835, the national debt was only $33,733.05, but it quickly grew into the millions again. The first dramatic growth spurt of the debt occurred because of the Civil War. The debt was just $65 million dollars in 1860, but passed $1 billion in 1863 and had reached $2.7 billion following the war. The debt slowly fluctuated for the rest of the century, finally growing steadily in the 1910s and early 1920s to roughly $22 billion as the country paid for involvement in World War I. The buildup and involvement in World War II brought the debt up another order of magnitude from $43 billion in 1940 to $260 billion following the war. After this period, the debt's growth closely matched the rate of inflation until the 1980s, when it again began to skyrocket. The public debt briefly started to go down in 2000 …show more content…
Of the three, the last one may be the most susceptible to the influence of policymakers. The larger the capital stock, the more productive the labor force tends to be.
While it may be possible for fiscal policy to have an effect on the rate of technological progress in the way public money is spent, it probably has a much larger effect on growth through its influence on the size of the domestic stock of capital and the amount of capital available to each worker in the labor force. The total value of national output can be measured in two ways. Either the total value of the goods and services produced can be added up, or the total value of the incomes resulting from that production can be counted.
The measure of total output based on the value of production is typically subdivided into several categories of demand. Specifically, it is calculated as the sum of consumption spending (C), investment (I), government spending (G) and the difference between exports (X) and imports (M):
GDP = C + I + G + (X - M) The alternative measure of total output is the sum of the various uses to