What is Happening to The US Fiscal Deficit and National Debt？

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Presentation transcript:

What is Happening to The US Fiscal Deficit and National Debt？ Group 2

Outline What is happening？ Why it happened？ What’s the influence？

Current Status White house predict on 7/15 Current fiscal budget deficit 600 billion (increase 162 billion from last year) National debt increase from 10.6 trillion to 19.3 trillion (2009 to 2016)

exceeding the historical peak after World War II rise to 141% in 2046 risen to 75% in the wake of a financial crisis and a recession. exceeding the historical peak after World War II 39% at the end of fiscal year 2008

Why it happened？ Mailnly due to 821 billion reovery act of 2009 Affordable care act Other measures for American business Spending (increase rate larger than revenue) Social Security(aging of the U.S. population, subsidies for health insurance) Major Health Care Programs (aging of the U.S. population, subsidies for health insurance) Other Noninterest Spending Net Interest (interest rates are expected to be higher；increase in deficits: The larger they are, the more the government will need to borrow.) Revenue Individual Income Taxes Corporate Income Taxes Payroll Taxes Other Revenue Sources

What’s the influence？ More debt more interest paid Creditors worry about the solvency of high debt government Debt decrease tax revenue in the long run Exchange rate upset global financial market/trade US society securities fund, banks, insurance companies are the biggest owner of treasury bonds.