Government debt is simply the amount of money owed by a government entity, whether it’s on the municipal, state, or federal level. Most often, government debt is referred to as the total debt owed by the federal government, otherwise known as the national debt.
Government debt in recent years has been the source of considerable concern as its size has increased significantly due to the Great Recession. Reduced economic activity and personal incomes reduced tax revenues to the government; this, combined with continued government spending, has produced significant annual deficits, which have contributed greatly to the rising national debt.
What’s often referred to as an important statistic regarding the national debt is the debt-to-GDP ratio, which represents an economy’s ability to service the debt on its books. The U.S.’ total debt-to-GDP ratio is now greater than 100%, significantly higher than its historical average over the last century.
Government forecasters are warning the U.S. budget deficit will more than double as a share of economic output by 2040 if current tax and spending laws remain unchanged.On Tuesday June 16, the Congressional Budget Office (CBO) released the 2015 Long-Term Budget Outlook. (Source: The Congressional Budget Office, June 16, 2015.)According. Read More
Over the past few years, the U.S. national debt has increased drastically since the financial crisis. To give some perspective, since President Obama has taken office, U.S. public debt has jumped by $7.0 trillion. (Source: Committee Responsible Federal Budget, May 11.2015.)With stocks at an all-time high, people aren’t paying. Read More
For the U.S. federal government’s fiscal year, which ends this Tuesday, the Congressional Budget Office (CBO) predicts a budget deficit of $506 billion. (Source: Congressional Budget Office web site, September 26, 2014.)But just because our annual deficit is declining, that doesn’t mean our national debt is rising by an equal. Read More
I’m going to put aside my daily ranting about the stock market and the economy today to bring what I believe is an important story to the attention of my readers.There is no doubt you’ve heard about how poorly the city of Detroit, Michigan is faring now that the automotive sector has all but closed up there.Yesterday, news came that. Read More
The U.S. government, after winning World War II for the Allies, was very convincing. It told central banks around the world that they should hold the U.S. dollar as their reserve currency instead of gold, based on the idea the U.S. dollar would be backed by gold. Only limited amounts of U.S. dollars could be printed, because the currency. Read More