1. DEBT vs DEFICIT

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

3. 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

4. 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

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

8. Our growing Debt 1980 – Reagan – Debt is 1 trillion
– Reagan/Bush trillion
– Clinton trillion
Bush + 5 trillion
2009-current- + 6 trillion