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Deficit and Debt
Discretionary v. Automatic ,[object Object],[object Object]
Discretionary Fiscal Policy ,[object Object],[object Object],[object Object],[object Object],[object Object],12-30 Copyright   2002 by The McGraw-Hill Companies, Inc.  All rights reserved.
Discretionary Fiscal Policy ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],12-31 Copyright   2002 by The McGraw-Hill Companies, Inc.  All rights reserved.
Discretionary Fiscal Policy ,[object Object],[object Object],[object Object],[object Object],[object Object],12-32 Copyright   2002 by The McGraw-Hill Companies, Inc.  All rights reserved.
Who Makes Fiscal Policy? ,[object Object],[object Object],[object Object],12-33 Copyright   2002 by The McGraw-Hill Companies, Inc.  All rights reserved.
The Deficit Dilemma** ,[object Object],[object Object],[object Object],[object Object],12-35 Copyright   2002 by The McGraw-Hill Companies, Inc.  All rights reserved.
The Deficit Dilemma ,[object Object],[object Object],[object Object],12-36 Copyright   2002 by The McGraw-Hill Companies, Inc.  All rights reserved.
The Deficit Dilemma ,[object Object],[object Object],[object Object],12-37 Copyright   2002 by The McGraw-Hill Companies, Inc.  All rights reserved.
The Deficit Dilemma 12-38 Deficits and Surpluses:  The Record Copyright   2002 by The McGraw-Hill Companies, Inc.  All rights reserved. The Federal Budget Deficit, Fiscal Years 1970-2001 Deficits Surpluses
Why Are Large Deficits So Bad? ,[object Object],[object Object],12-39 Copyright   2002 by The McGraw-Hill Companies, Inc.  All rights reserved.
Why Are Large Deficits So Bad? ,[object Object],[object Object],12-40 Copyright   2002 by The McGraw-Hill Companies, Inc.  All rights reserved.
Why Are Large Deficits So Bad? ,[object Object],12-41 Copyright   2002 by The McGraw-Hill Companies, Inc.  All rights reserved.
Why Are Large Deficits So Good? ,[object Object],[object Object],[object Object],12-42 Copyright   2002 by The McGraw-Hill Companies, Inc.  All rights reserved.
Will We Be Able to Balance Future Budgets ? ,[object Object],[object Object],[object Object],[object Object],[object Object],12-43 Copyright   2002 by The McGraw-Hill Companies, Inc.  All rights reserved.
Will We Be Able to Balance Future Budgets? ,[object Object],12-44 Copyright   2002 by The McGraw-Hill Companies, Inc.  All rights reserved.
[object Object],[object Object]
The Proposed Balanced Budget Amendment and the Line Item Veto ,[object Object],[object Object],[object Object],[object Object],[object Object],12-45 Copyright   2002 by The McGraw-Hill Companies, Inc.  All rights reserved.
The Proposed Balanced Budget Amendment and the Line Item Veto ,[object Object],[object Object],[object Object],12-46 Copyright   2002 by The McGraw-Hill Companies, Inc.  All rights reserved.
Should the Budget be Balanced? ,[object Object],[object Object]
The Federal Budget Deficit & The Business Cycle The budget deficit as a percentage of GDP tends to rise during recessions (indicated by shaded areas) and fall during expansions. These Deficits help end the recessions
Defining Surpluses and Debt ,[object Object],[object Object]
The Definition of Debt and Assets ,[object Object],[object Object],[object Object]
Long-Run Implications ,[object Object],[object Object]
A String of Deficits 1970 1994 1996 1998 2000 2002 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 Budget Surpluses Budget Deficits
The U.S. Government Has Always Been in Debt Except ,[object Object],[object Object]
The Public Debt ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],12-48 Copyright   2002 by The McGraw-Hill Companies, Inc.  All rights reserved.
The Public Debt 12-49 Copyright   2002 by The McGraw-Hill Companies, Inc.  All rights reserved. National Debt, 1975-2000 Economic Report of the President, 2000
The Public Debt ,[object Object],[object Object],[object Object],[object Object],12-50 Copyright   2002 by The McGraw-Hill Companies, Inc.  All rights reserved.
Who do we owe? ,[object Object],[object Object],[object Object]
Debt Federal Reserve (9%) © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved. Foreign individuals and firms (25%) U.S. individuals and firms (24%) U.S. government  agencies (42%)
Debt Burden ,[object Object],[object Object],[object Object]
Difference Between Individual and Government Debt*** ,[object Object],[object Object]
Difference Between Individual and Government Debt** ,[object Object],[object Object]
The Public Debt ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],12-51 Copyright   2002 by The McGraw-Hill Companies, Inc.  All rights reserved.
Debt and Our Children ,[object Object],[object Object]
Interest Rates and Debt Burden ,[object Object],[object Object]
Interest Rates and Debt Burden ,[object Object],[object Object]
The Public Debt ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

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Deficit and debt

  • 2.
  • 3.
  • 4.
  • 5.
  • 6.
  • 7.
  • 8.
  • 9.
  • 10. The Deficit Dilemma 12-38 Deficits and Surpluses: The Record Copyright  2002 by The McGraw-Hill Companies, Inc. All rights reserved. The Federal Budget Deficit, Fiscal Years 1970-2001 Deficits Surpluses
  • 11.
  • 12.
  • 13.
  • 14.
  • 15.
  • 16.
  • 17.
  • 18.
  • 19.
  • 20.
  • 21. The Federal Budget Deficit & The Business Cycle The budget deficit as a percentage of GDP tends to rise during recessions (indicated by shaded areas) and fall during expansions. These Deficits help end the recessions
  • 22.
  • 23.
  • 24.
  • 25. A String of Deficits 1970 1994 1996 1998 2000 2002 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 Budget Surpluses Budget Deficits
  • 26.
  • 27.
  • 28. The Public Debt 12-49 Copyright  2002 by The McGraw-Hill Companies, Inc. All rights reserved. National Debt, 1975-2000 Economic Report of the President, 2000
  • 29.
  • 30.
  • 31. Debt Federal Reserve (9%) © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved. Foreign individuals and firms (25%) U.S. individuals and firms (24%) U.S. government agencies (42%)
  • 32.
  • 33.
  • 34.
  • 35.
  • 36.
  • 37.
  • 38.
  • 39.

Notas do Editor

  1. Source: Congressional Budget Office, National Bureau of Economic Research.