ECON 2305 Lecture 27 Outline of Last Lecture I National Debt II Federal Budget Outline of Current Lecture I National Debt Public debt II Budget Deficit Current Lecture National Debt Public debt Accumulation of the many budget deficits Budget deficit Expenditures exceed tax revenues Why are we in debt Wars War of independence WWII National Debt 125 of GDP Macro goals recessions Social Entitlement programs Difficult to cut Non discretionary Problems with debt Size Interest on the debt External debt Future generation issue Rate of increase What can we do about it Cut spending the DEFICIT Taxes increase but on who Default These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute Refinance Sale of Assets Show US citizens some seriousness REALITY Not ONE answer What is the issue Too much spending not enough revenue Congressional dilemma Super committee why did they fail Budget Philosophies Balanced budget Revenues Expenditures Amend the constitution Attempted multiple times 1995 Cyclically balanced Think business cycle Functional finance Meet macro goals Reduce government spending Increased tax revenues from an expanding economy
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