ECO203 Week 3 Discussion 2 Budget Deficits and the National Debt

By definition the meaning of a budget deficit is the amount by which the federal government expenditures(the amount that is spent) exceed its revenues(the amount that is taken in) in a given fiscal year which runs from 1 October to 30 September. The meaning of national debt is the cumulative total of all past budget deficits minus all past surpluses, basically the amount owed to lenders by the federal government(Amacher, R., & Pate 2013). I honestly feel that our current debt situation is scary for the future of not only our kids but people like myself that are retiring from the military soon and expect to have that income as a dependable source of income for the rest of our lives. Our current situation as a government is so expansively invested on a multitude of things such as things such as mortgage and student loans amongst other private sector borrowing that we are increasingly over our budget. With the current risk, a lot of households and business firms are very limited on the amount what they can spend over a great deal of time due to the fact the threat of bankruptcy is very realistic in their future. Our deficit also means that we as a country we aren’t controlling the size of our public sector which would force us to rely on spend now and pay later approach when it comes to taxes which some legislators prefer. We’re also forced to increased interest rates and trade deficits which means we spend we import more from foreign country’s than we export from our own.

REFERENCES:

Amacher, R., & Pate, J. (2013). Principles of Macroeconomics. [Electronic Edition]. Retrieved from https://content.ashford.edu