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… ]