Deficit Spending: The Deficit Good Or Bad
"Spending financed not by current tax receipts, but by borrowing or
drawing upon past tax reserves." , Is it a good idea? Why does the U.S. run a
deficit? Since 1980 the deficit has grown enormously. Some say its a bad thing,
and predict impending doom, others say it is a safe and stable necessity to
maintain a healthy economy.
When the U.S. government came into existence and for about a 150 years
thereafter the government managed to keep a balanced budget. The only times a
budget deficit existed during these first 150 years were in times of war or
other catastrophic events. The Government, for instance, generated deficits
during the War of 1812, the recession of 1837, the Civil War, the ...
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enough to make up the difference. Also, the deep recession
of the early 1980s reduced revenues, raising the deficit and forcing the
Government to spend much more on paying interest for the national debt at a time
when interest rates were high. As a result, the national debt grew in size after
1980. It grew from $709 billion to $3.6 trillion in 1990, only one decade later.
Increase of National Debt Since 1980
Month Amount
--------------------------------------------
12/31/1980 $930,210,000,000.00 *
12/31/1981 $1,028,729,000,000.00 *
12/31/1982 $1,197,073,000,000.00 *
12/31/1983 $1,410,702,000,000.00 *
12/31/1984 $1,662,966,000,000.00 *
12/31/1985 $1,945,941,616,459.88
12/31/1986 $2,214,834,532,586.43
12/31/1987 $2,431,715,264,976.86
12/30/1988 $2,684,391,916,571.41
12/29/1989 $2,952,994,244,624.71
12/31/1990 $3,364,820,230,276.86
...
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greatly expanded Federal programs. Federal spending, which totaled less
than $4 billion in 1931, went up to nearly $7 billion in 1934 and to over $8
billion in 1936. Then, U.S. entry into World War II sent annual Federal spending
soaring to over $91 billion by 1944. Thus began the ever increasing debt of the
United States.
What if the debt is not increasing as fast as we think it is? The dollar
amount of the debt may increase but often times so does the amount of money or
GDP to pay for the debt. This brings up the idea that the deficit could be run
without cost.
How could a deficit increase productivity without any cost? The idea of
having a balanced budget is challenged by the ...
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"Deficit Spending: The Deficit Good Or Bad." Essayworld.com. October 14, 2006. Accessed November 23, 2024. http://www.essayworld.com/essays/Deficit-Spending-The-Deficit-Good-Bad/53901.
"Deficit Spending: The Deficit Good Or Bad." Essayworld.com. October 14, 2006. Accessed November 23, 2024. http://www.essayworld.com/essays/Deficit-Spending-The-Deficit-Good-Bad/53901.
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