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Assignment 1 Deficit Spending.docx - DEFICIT SPENDING IN...

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DEFICIT SPENDING IN THE AMERICAN ECONOMY1Deficit Spending in the American EconomyIan P. AbrahamzonECON 102American Military University
DEFICIT SPENDING IN THE AMERICAN ECONOMY2Deficit Spending in the American EconomyFor years, The United States has been operating at a deficit.By late 2007, War, SocialPrograms, and Entitlements had stacked up to create a tremendous yearly government expenditure.Coupled with major tax cuts for the upper and middle class, dubbed the “Bush Tax Cuts”, the UnitedStates was already operating at questionable levels of debt (Amadeo, n.d.).In 2008 and 2009 however,a recession hit when the housing bubble burst and many were unable to afford to keep their new homewhen the interest on their adjustable rate mortgage went through the roof.Many families had no choicebut to default and watch their home be foreclosed on.At the same time, businesses were forced to layoff workers in order to deal with the lean time.During what is now known as the “Great Recession”, unemployment skyrocketed.Tax revenuefrom the working class went down, and government spending on social programs like unemploymentbenefits, food stamps, and health care went up.The spike in unemployment forced the United States tointervene with stimulus spending and bailouts for organizations deemed “too big to fail” for fear oflosing even more jobs (Haveman, 2010).

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Term
Summer
Professor
N/A
Tags
Great Depression, federal spending

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