E.4.7+Predict+how+changes+in+federal+spending+and+taxation+would+affect+budget+deficits+and+surpluses+and+the+national+debt.



//Focus Question: How would changes in federal spending and taxation would affect budget deficits and surpluses and the national debt?//


Definition of terms according to "A Guide to the Federal Budget Deficit and National Debt," //Bill of Rights in Action, 20// (3), 5-11 from the Constitutional Rights Foundation:

Budget Deficit

 * "occurs when the government spends more than it collects in taxes and other income during a fiscal year"
 * Fiscal Year is October 1 to September 30.
 * 2014-2015 projected deficit is $514 billion. That is $514,000,000,000, which is an overall decrease.

[|U.S. Federal Budget Deficit Definition]

The deficit has decreased in the last few years, and continues to drop.

National Debt

 * "total amount the government owes from its borrowing."
 * 2014 total is $17.5 trillion
 * Public Debt is Treasury securities held by investors outside the federal government (about $9 trillion of the $13.8 trillion total debt)
 * Obligations make up the rest of the debt and consists of the debts the government owes itself.

**Budget Surplus**

 * Occurs when government spending is less than government revenue in a given time period.
 * Surplus= Revenue - Spending, where revenue is greater than spending.


 * Note:** That the deficit and the debt are NOT the same thing. Journalists and politicians confuse them all of the time.

To examine and reallocate your federal income taxes, see [|Your Tax Receipt] in the Interactive Data section of the National Priorities Project website. For example, in fiscal 2012, a household paying $6000 in federal taxes, would see their money spent as follows:
 * Click here for a [|real-time National Debt Clock].
 * Click here for learn about Budget and Federal Debt
 * $511.39 to Medicaid
 * $39.60 to nuclear weapons
 * $26.53 to transportation infrastructure
 * $14.17 to WIC nutritional program
 * $.89 cents to Corporation for Public Broadcasting (from "Where Your Money Went," Maureen Turner, The Valley Advocate, April 11-17, 2013, p.17)

The [|National Budget Simulation] from the National Council on Economic Education.

[|Does High Public Debt Consistently Stifle Economic Growth]?
 * Study by University of Massachusetts Amherst researchers Thomas Herndon, Micahel Ash, and Robert Pollin (April, 2013)
 * Statement from the study: "But judicious deficit spending remains the single most effective tool we have to fight against mass unemployment caused by severe recessions."
 * Written in response to a 2010 study from two Harvard University researchers that argued that public spending must be cut to reduce debt and create economic growth