1. National Debt

2. The National Debt
So, what if you continue to increase government spending and can not afford to continue to raise taxes?!?
For decades the national government’s yearly budget spends more money than it brings in revenue
How does the government make up the difference?
BORROWING !!
sells Treasury Bills (matures in 26 weeks or less)
sells Treasury Notes (matures from 2 to 10 years)
sells Treasury Bonds (matures in 30 years)
Current National Debt Who Owns the Debt?

3. Who Holds US Debt ?

4. The National Debt – for yr 2014
Where the money comes from:
Individual Income Tax: $1.39 trillion
Corporate Income Tax: $320 billion
Corporate Payroll Tax: $1.02 trillion
Social Security, Medicare, etc.
Excise Taxes: $93 billion
Taxes on specific goods…gas, tobacco, etc.
Other Taxes: $189 billion
Tariffs, estate and gift taxes, etc.
Total Revenue
$3.02
trillion
Where the money goes:
Defense: $603 billion
Social Security: $850 billion
Medicare/aid: $511 billion
Interest on debt: $228 billion
Federal Pensions: $150 billion
Total Spending
$3.51
trillion
Income Security: $514 billion
Unemployment, Welfare, etc
Other: $658 billion
“Servicing the Debt” : Paying the interest on the debt
Deficit
$484
billion
Data generated from Office of Management and Budget (

5. The Debt Ceiling
By law, the Federal Government can only borrow so much money each year (as approved by Congress). Once it reaches that limit it can no longer borrow money.
If it cannot borrow money needed to cover the budget, then spending will have to be cut immediately.
That may mean people do not get paid, programs have to be cut and/or those that loaned us money will not get paid.

7. The Debt Ceiling The debt ceiling has been raised 15 times since 2000.
What does this mean for our economy?