lectur3-page4 - budget surpluses may only be a temporary...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
You can see that the federal government has been running annual deficits for many years. Until 1998 when the government ran a $69.3 billion budget surplus, the last time the federal government ran a surplus was in 1969 ($3.2 billion), and before that in 1960 ($.3 billion). Above you will notice that the annual deficit grew from 1990 to 1992. We had a recession during this time period. The economy did remarkably well with low unemployment, real GDP growth averaging about 4.8% since the end of 1995, and little inflation. That ended when the 2001 recession came along from March 2001 to November 2001 The shift from budget deficits to budget surpluses March 2001 to November 2001. The shift from budget deficits to budget surpluses from 1998 to 2001 was due more to the increased tax revenues from a strong economy than government spending cuts. Some analysts at that time proposed that we would “grow” out of our national debt, others at that time cautioned that those
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: budget surpluses may only be a temporary reprieve due to demographic circumstances. Baby boomers were in their prime earning years then, but TODAY the first baby boomers are retiring. Lower tax revenues? Increased spending on medicare, medicaid, and social security? Which analysts were correct? In 1997, medical spending in the U.S. hit $1.032 trillion, that is a little over 1,000 billion dollars. In 2003, medical spending in the U.S. hit $1.7 trillion. In 2006, medical spending in the U.S. was $2.6 trillion. 4 A government report recently estimated that spending on health care in the United States could double by 2017, reaching $4.3 trillion and accounting for 19.5 percent of the nation's gross domestic product. The report was published in the Feb. 26, 2008 online edition of Health Affairs ....
View Full Document

This note was uploaded on 12/29/2011 for the course ECO 210 taught by Professor Malls during the Fall '10 term at SUNY Stony Brook.

Ask a homework question - tutors are online