DEBT vs DEFICIT

Debt – The total amount of money that is owed Deficit – The amount of money owed in a fiscal year (12 months)

Spending and Programs Deficit Spending – spending more than you have (Credit Cards) Mandatory Spending Required by law to spend on certain programs Social programs Net interest

2 Spending Categories Discretionary spending - The government can decide/choose where to spend Entitlement Programs (mandatory) Social programs that people are “entitled to” if they meet certain qualifications Spending level is required by federal law Examples: Social Security, Medicare, Medicaid, VA programs, unemployment, Food Stamps, Retirement plans for Federal Employees

Fiscal Policy – Spending and taxing by the government that determines our budget Privatization – sell assets owned by the government to individuals or businesses

Our growing Debt 1980 – Reagan – Debt is 1 trillion 1980 - 1992 – Reagan/Bush - + 4 trillion 1993 - 2000 – Clinton - + 1 trillion 2001-2008 -Bush + 5 trillion 2009-current- + 6 trillion