The U S Budget Growing National Debt Should

The U. S. Budget & Growing National Debt Should we be worried?

What is a Budget? Budget—A plan for saving and spending

The Government Budget Government Revenue Taxes Government Spending All Gov’t Expenses

Deficit vs. Debt • Deficit: How much more Government spends than it receives in tax revenue over 1 - year • Debt: Total amount Government owes (has borrowed OVER TIME)

Entitlement Spending Definition of Entitlement: a guarantee of access to benefits because of rights, or by agreement through law • Includes- Social Security, Medicare & Medicaid

Three Largest Entitlement Programs • Medicare: --Health care for those over age 65 • Medicaid: --Health care for the poor • Social Security: --pension money for those who retire --unemployment insurance; disability

Government Spending • Social Security • Medicare • • Medicaid Interest on Debt Defense Spending Homeland Security Education Other Total 26. 7% 15. 9% 9. 9% 8. 5% 15. 5% 1. 0% 1. 7% 19. 6% 100. 0% 52% of Budget

US Demographics • By 2040 1 in 4 Americans will be over 65 • This FACT guarantees that entitlement spending will increase • It is projected to increase to over 60% of the federal budget by 2040!

Federal Budget Summary • Projected Deficit for ‘ 17: $392 Billion dollars • Total Debt: http: //www. usdebtclock. org/ $19. 84 Trillion dollars

How does the US borrow $ to pay for deficit spending? U. S. Treasury Department sells “Treasuries” —Treasury bills, Treasury notes, Treasury bonds Treasuries = a very safe investment Example: I buy a $1000 five-year Treasury note with a 4% annual interest rate --every 6 months I receive an interest payment: ($1000 X 4%) / 2 = $20 --at the end of five years the U. S. Treasury pays me back my $1000

Growth of Entitlement Spending 1964 . 1984 . 9% Defense Social Security Net interest All other spending *Current services estimate. Source: Budget of the United States Government, FY 2005, Office of Management and Budget. 2004* 19% Medicare & Medicaid

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