Financing Government Chapter 16.

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Presentation transcript:

Financing Government Chapter 16

Borrowing And the Public Debt Section 2 Borrowing And the Public Debt

Borrowing Power granted by the Constitution that has been used over the last 200+ years. To meet the costs of crisis situations, such as wars. To pay for large-scale projects. Since the Great Depression the government has used it to finance budget deficits Economic stimulus Supply v. Demand side economics Most recently 2007-2009 recession

The Deficit Congress authorizes all federal borrowing The Treasury Department issues securities to investors. Individuals, banks, financial institutions, foreign governments. Since 1789 government has only recorded a surplus 19 times. Since 1981 deficit has ballooned Today it amounts to over 13,000,000,000,000.00