The National Debt Mr. Seely Economics. Balancing the Budget Balanced Budget- a budget in which total revenues are equal to total spending. Budget Surplus-

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Presentation transcript:

The National Debt Mr. Seely Economics

Balancing the Budget Balanced Budget- a budget in which total revenues are equal to total spending. Budget Surplus- a budget in which the government takes in more revenue than it spends. Budget Deficit- a situation in which the government spends more than it takes in.

Responses to a Budget Deficit Creating Money- –Creating more money to pay for its workers salaries and benefits for its citizens. –Problems: Inflation and/or Hyperinflation Borrowing Money- –The government borrows from its citizens through Treasury Bills, Notes, and Bonds. –Problems: National Debt

The National Debt National Debt- the money the federal government owes to its bondholders. Debt vs. Deficit Currently our National Debt is around 9.1 trillion dollars and is continuing to grow as we speak. Lets take a look!

Problems of a National Debt Crowding-out Effect- –The loss of funds for private investment due to government borrowing. The more the Government borrows, the more interest they owe.