US Fiscal Policy - Elizabeth Christy US Fiscal Policy...

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Elizabeth Christy US Fiscal Policy 11/28/10 Instructor Kevin Camden MBA 510-D2B0 Economics Benedictine University US Fiscal Policy By reducing tax revenues and increasing expenditures simultaneously, however, the federal government will throw its budget out of balance (Schiller, 2010). Deficit spending is a situation in which the government borrows funds to pay for spending that exceeds tax revenues (Schiller, 2010). The U.S. Federal Deficit is when government spending is greater than revenue received for that year. In Fiscal Year 2011, the budget deficit will be $1.267 trillion; the fiscal year 2010 deficit was $1.57 trillion (Amadeo, 2010). The U.S. Federal Debt is over $13 trillion. This is more than double the debt in 2000, which was $6 trillion. Each year, the deficit is added to the debt. The Treasury must sell Treasury bonds to raise the money to cover the deficit. This is known as the public debt, since these bonds are sold to the public (Amadeo, 2010).
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In addition to the public debt, there is the money that the government loans to itself each year. This money is in the form of Government Account Securities, and it comes from the Social
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US Fiscal Policy - Elizabeth Christy US Fiscal Policy...

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