Aim: How does the budget deficit and national debt influence our economy Do Now: What is a budget?

Aim: How does the budget deficit and national debt influence our economy? President Congress Revenues (taxes) Expenditures (spending/appropriations) Categories of spending (Big 3)

Aim: How does the budget deficit and national debt influence our economy? Define Budget Surplus?

Aim: How does the budget deficit and national debt influence our economy? Define – 18 trillion dollars

Interest Payments on the Debt Aim: How does the budget deficit and national debt influence our economy? Interest Payments on the Debt part of the budget Grows as the debt grows 7% of budget due to low interest rates

Effects of National Debt Aim: How does the budget deficit and national debt influence our economy? Effects of National Debt Crowding out (?) Increase total demand ofr goods/services (inflation) Interest payments on debt Foreign owned portion

Summary: Budget Deficit and National Debt 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?

Summary: Budget Deficit and National Debt 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 ________________.

Aim: How does the budget deficit and national debt influence our economy? What is the current level of the U.S. national debt? What are some negative effects of a large national debt?

Aim: How should the problem of budget deficits and the national debt be dealt with? Do Now: What is a budget deficit? What is the national debt?

Aim: How should the problem of budget deficits and the national debt be dealt with? Cut Spending? Which areas? Negative effects? Politicians?

Aim: How should the problem of budget deficits and the national debt be dealt with? Raise Taxes For whom? How much? Negative effects

Aim: How should the problem of budget deficits and the national debt be dealt with? Balanced Budget Amendment Define difficulties? Good for the economy?

Aim: How should the problem of budget deficits and the national debt be dealt with? Demand-Side Theory Keynesian Economics Deficit spending to stimulate the economy during a recession/contraction Democrats favor this theory

Aim: How should the problem of budget deficits and the national debt be dealt with? Supply-Side theory Across the board tax cuts Individuals and corporations “trickle down” economics Stimulate the economy Reaganomics Favored by Republicans

Aim: How should the problem of budget deficits and the national debt be dealt with? Other concerns Can we afford our debt? Debt as a percentage of GDP Foreign owned portion of the debt

Aim: How should the problem of budget deficits and the national debt be dealt with? Does the problem of budget deficits and national debt need to be solved for? Explain.