Fiscal Policy
United States Deficit, Surplus, and Debt
ECO/372
United States Deficit, Surplus, and Debt
In the United States, the deficit, surplus, and debt of the nation have an effect on many aspects of the nation’s economy. Taxpayers carry heavy burdens, both today and in the future, to support the economy as it recovers from a recession. Future Social Security and Medicare users face uncertainty and possible poverty as current negative cash-flow eats away at the integrity of future Social Security and Medicare. The effects of a high unemployment rate create a ripple effect that certainly will reach into the economy of coming years. Gross Domestic Product is affected as international trade and deficit fluctuate with the country’s interest rates, inflation, and dollar buying power. Even University of Phoenix students see the effect of these economic aspects in their tuition. Although these are not the only issues of concern in the current economy, these serious issues are affected by the deficit, surplus, and debt of the nation.
According to experts, the taxpayers eventually will pay the costs of today’s deficit tomorrow. To finance last year’s trade gap, Americans had to borrow $503 billion in international markets. Foreigners will buy billions of dollars’ worth of United States corporate mortgages, and government bonds. They lend Americans the money needed to import more from the rest of the world (Ackerman, 2004). The additional expense is the burden of the American taxpayer. Meanwhile, inflation occurs and prices increase. This causes the value of money to decrease and people do not have as much purchasing power as they did before (Carty, 2010). Despite this, the federal debt is still growing, and according to some experts, each household owes $3500 more today than at the start of the year. The effect on taxpayers is that they eventually will have to pay, no matter where the debt lands.
The future of Social Security and Medicare is
ECO/372
United States Deficit, Surplus, and Debt
In the United States, the deficit, surplus, and debt of the nation have an effect on many aspects of the nation’s economy. Taxpayers carry heavy burdens, both today and in the future, to support the economy as it recovers from a recession. Future Social Security and Medicare users face uncertainty and possible poverty as current negative cash-flow eats away at the integrity of future Social Security and Medicare. The effects of a high unemployment rate create a ripple effect that certainly will reach into the economy of coming years. Gross Domestic Product is affected as international trade and deficit fluctuate with the country’s interest rates, inflation, and dollar buying power. Even University of Phoenix students see the effect of these economic aspects in their tuition. Although these are not the only issues of concern in the current economy, these serious issues are affected by the deficit, surplus, and debt of the nation.
According to experts, the taxpayers eventually will pay the costs of today’s deficit tomorrow. To finance last year’s trade gap, Americans had to borrow $503 billion in international markets. Foreigners will buy billions of dollars’ worth of United States corporate mortgages, and government bonds. They lend Americans the money needed to import more from the rest of the world (Ackerman, 2004). The additional expense is the burden of the American taxpayer. Meanwhile, inflation occurs and prices increase. This causes the value of money to decrease and people do not have as much purchasing power as they did before (Carty, 2010). Despite this, the federal debt is still growing, and according to some experts, each household owes $3500 more today than at the start of the year. The effect on taxpayers is that they eventually will have to pay, no matter where the debt lands.
The future of Social Security and Medicare is
Bibliography: Ackerman, S. (2004, December). The Budget Deficit’s Bigger Brother. Retrieved October 2012, from fair.org: http://www.fair.org/index.php?page=3562 Carty, S. (2010, October 11). Factors That Can Affect the Appreciation or Depreciation of Currency. Retrieved October 2012, from ehow.com: http://www.ehow.com/list_7321916_factors-affect-appreciation-depreciation-currency.html Colander, D. C. (2010). Macroeconomics. Boston, MA: McGraw-Hill/Irwin. Investopedia. (2012, unk.). Interest Rate. Retrieved October 2012, from investopedia.com: http://www.investopedia.com/terms/i/interestrate.asp Kessler, G. (2011, July 12). Social Security and its role in the nation’s debt. Retrieved October 2012, from washingtonpost.com: http://www.washingtonpost.com/blogs/fact-checker/post/social-security-and-its-role-in-the-nations-debt/2011/07/11/gIQAp1Wl9H_blog.html