realdebt - Q: A: revenue.Addupallthedeficits('ve...

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Q:  What is the difference between the Debt and the Deficit?  A:  The National Debt  is the total amount of money owed by the government;  the federal budget deficit  is the yearly amount by which spending exceeds  revenue. Add up all the deficits (and subtract those few budget surpluses we've  had) for the past 200+ years and you'll get the current National Debt.  Politicians love to crow "The deficit is down! The deficit is down!" like it's a great  accomplishment. Don't be fooled. Reducing the deficit just means we're adding  less to the Debt this year than we did last year. Big deal -- we're still adding to the  Debt. When are we going to start seeing the Debt actually go down?  Q:  How has the National Debt grown over time?  A:  The National Debt on January 1st 1791 was just $75 million dollars. Today, it  rises by that amount every hour or so.  The following graph shows how the National Debt has grown year by year since  1940 in actual dollar amounts, uncorrected for inflation: 
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This data was gathered from the  U.S. Treasury department's web site From time to time, I've gotten e-mail saying that the above graph is flawed -- it's  just showing normal inflation. Well, I took the Debt numbers from the above  graph and converted them all to 2000 dollars. Picking a different year would not  have changed the shape of the graph below, just its height: 
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As you can see, except for a rise at the end of World War II, the Debt remained  remarkably constant for nearly forty years when inflationary forces are taken into  account. After 1983 however, with the notable exception of the Fiscal Years  ending in September of 2000 and 2001, the trend has been upward even when  inflation is taken into account.  
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FOLLOWING MATERIALS EXTRACTED FROM WIKEPEDIA Structure of the debt The Bureau of the Public Debt divides the national debt into two main categories: debt held by the public, and intragovernmental holdings. Intragovernmental debt includes money for government trust funds , such as pension plans and the debt for social security , which is about $1.7 trillion as of May 2005. Overall, intragovernmental holdings account for over $3.1 trillion of the total debt at this time. The remaining $4.6 trillion or so has been purchased by the public, including foreign entities. This largely comes from the issuance of U.S. Treasury securities . Nearly half ($2.2 trillion) is composed of Treasury notes (aka T-notes), while T-bills and T-bonds (including savings bonds) cover most of the remaining public portion of the debt. Bonds sold for infrastructure projects are also part of the national debt. It is common for individual Americans and businesses to buy bonds and other securities,
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This note was uploaded on 02/07/2011 for the course ECON 3461 taught by Professor Spencer during the Spring '10 term at Golden West College.

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realdebt - Q: A: revenue.Addupallthedeficits('ve...

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