What is a budget deficit? When spending exceeds revenue What is total national debt? The sum of all the deficits we have accumulated over time What are some reasons why the budget deficit and nonbudgeted spending have been adding more than $500 billion to the national debt in recent years? Citizens petitioning/pressuring for tax cuts (refusing to pay for what we want), borrowing more money than we can pay back Name three countries that loan money to the U.S. government. What instruments do they receive to guarantee their loans? China, Japan, European Union; they receive full faith and credit from the US On several occasions, a balanced budget amendment has been proposed as law but not passed by Congress. What would be the advantages and disadvantages of having such a law?Advantages: future generations will be free from the mistakes of previous generations, budget deficits would be impossible Disadvantages: government cannot offset federal recessions or respond productively to emergencies, such as natural disasters or war and thus would be ineffective What was PAYGO? What happened to that policy, and how did it impact the budget deficit? If the government wanted to propose a tax cut, they had to find ways to pay for the difference BEFORE it became law with an offsetting tax/spending cut. It expired in 2002 and so since the Bush administration didn’t come up with an alternative way to pay for expenses, the budget deficit skyrocketed According to Greg Ip of The Economist, President Bush's economic policy of cutting taxes and spending through borrowing was "politically smart" rather than "economically smart." Do you agree or disagree? Explain. I do agree, because it sounded to the people as an immediately good idea. However, they were not realizing that their money was funding the programs they so enjoyed- or they didn’t realize how this could plummet us into such a deficit. How did the U.S. government pay for the wars in Afghanistan and Iraq? Borrowed money from China to cut taxes for the upper class What impact did spending for the wars in Iraq and Afghanistan have on the budget deficit? The deficit soared
When compared to other countries, to what extent is the U.S. debt compared as a percentage
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