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How and why does the U.S.’s deficit, surplus and debt have an effect on The United State’s financial reputation on an international level?
‘National debt’ and ‘national deficit’ are tossed around – often interchangeably – and confuse rather than clarify an understanding of the U.S.’s ‘national debt’ status. [ In simplest terms, the federal budget is the amount of money set aside to finance the government’s operation for one fiscal year. The budget can be viewed as a two column sheet. One column represents the revenue collected to
finance the budget’s expenses. The second column represents the expenditures the government makes. Ideally, at the end of the year there should be more money left in the surplus column, or revenue exceeded expenditures. At the least, revenue should equal expenditures for a ‘balanced’ budget. Unfortunately, during the past decade expenditures have exceeded revenue to create deficits. A ‘national deficit’ or ‘budget deficit’ is considered part of the ‘national debt’ and is added to the debt each year that a deficit occurs. The effect is cumulative. The total ‘national debt’ is a combination of the debt held by the public or all federal securities held outside the government, and intergovernmental debt or treasury securities held in accounts and administered by the federal government. One of the troubling aspects of the debt held by the public is that it includes debt owed to foreign countries; roughly 32% of the national debt. In essence, this borrowing from other countries’ governments is borrowing from their citizens to pay for programs for our citizens. The solution to reducing the growing ‘national debt’ is less spending and more revenue… ]
Expert answered|millerhan|Points 133|
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Asked 9/18/2012 5:07:26 AM
Updated 4/13/2013 5:57:39 PM
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The United States is struggling with the fundamental or comprehensive which has hinder the strength of the United States. One major problem is the fiscal and trade deficits. "In 2010, the fiscal deficit in the United States was $1.3 trillion or approximately 9 percent of U.S. GDP" (The Brookings Institution.) The budget deficit and debt limit the resources to spend on production and investment. Similarly, the impact of imported products on employment in the United States is not as much as great as some sensational arguments might make it appear. This is because most products imported by the United States are not produced by the United States, or are produced by the United States in a quite small amount. The U.S. current account goods and services trade deficit which is balanced by our foreign investment surplus. Trade just means exchanging in which when we export fewer foreigners then they export to us. In all actually The U.S. could be getting compensate for that. By exporting less than we import the U.S. possibly could be gaining more assets such as financial assets short or long term. However, the trade deficit causes our foreign investment surplus and could result from the foreign investment surplus. The trade deficit and investment surplus are determine varies depending on people who choose to export, import and invest. When exports are greater than imports, the nation has to balance trade surplus.
Added 4/13/2013 5:57:39 PM
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