1. Debt and the Deficit
Is a deficit a problem?

2. debt clock

3. Deficit and Debt, Defined
Video clip about the debt and deficit (bottom of page)
Deficit
Debt
Compound Interest

4. Remember. . . In a balanced economy . . . Withdrawls = injections or
S+T+M = I+G+X

5. Types of Deficits
Trade deficit M > X
spending deficit G > T

6. T, where does it come from?
Data from Office of Management and Budget (OMB)

7. Where does the money go?
Entitlements:
Discretionary spending:

8. Another look from CNN, 2016

9. G, Where does the money go? Discretionary Spending
Data from Office of Management and Budget (OMB)

10. Where does the money come from when G>T?

11. Types of Government issued Debt
T-Bills: mature < 1 year
Treasury Notes: mature 2-10 years
Bonds: Mature > 30 years
US Savings Bonds

12. To whom is the money owed?
Data from Office of Management and Budget (OMB)

13. Foreign Holders of the National Debt
Data from U.S. Treasury

14. Growth of the National Debt and debt ceiling.
(interesting with the political party correlation and debt ceiling, though not in percent of GDP)

15. Growth of the National Debt asa percentage of GDP (St Louis Fed)
(it’s neat how it shows historical events, such as wars and recessions, since there is a correlation between those and the deficit)

16. National Debt as a percentage of GDP Worldwide, 2015

17. Short-run impact, 5 years
With excess capacity, little impact

18. Medium run, 5 - 15 years G>T and growing Falling savings rate
Baby boomers retirement means increased demand on medicare and social security
Less tax revenue, as boomers no longer working
Falling savings rate
Boomers are drawing down on their savings in 401k and other investment plans
Falling Investment rate
Deficits = increased borrowing = increased interest rates. This is called Crowding Out because

19. Long run, More than 15 years
As debt grows, more interest is owed relative to debt principle.
National savings rate will fall as more money goes to pay off interest, and less towards principle.

20. So . . . Is running a deficit a problem? debt clock

21. Other insights . . . IOUSA Byte-sized IOUSA- Solutions
Discussion question: Is the national debt a real problem?
What solutions do you see as viable?

22. Foreign Holders of the National Debt
(More recent but shows less countries)

23. National Debt as a Percentage of GDP
(I thought this was a cool graphic, more political sided, and compares presidents.)

24.
(Ownership of American debt, domestically vs. Internationally)

25. Historic National Debt adjusted for inflation
(Another choice for historical national debt adjusted for inflation)