The American National Debt Crisis - 2258 Words

Introduction In brief, citizens and companies will get a loan from a bank but when the US Government needs a loan it issues debt by selling Treasury financial instruments to other federal government agencies, people, companies, state- and local-governments, as well as to such equivalents abroad (Bureau of the Fiscal Service, 2013). The deficit is the ratio of spending and revenues in one year, but the national debt or federal debt is the sum of all previous deficits, less whatever sum the federal government has subsequently repaid. Hence, every annual government deficit due to borrowing is added to the national (federal) debt. A government surplus can reduce some of the national debt. Annually, the national debt incurs interest to be paid by the government which is linked to overall government spending (National Priorities Project, 2016). This paper will present and discuss the American national debt situation, propose two possible solutions and finally will endeavor to steer a conclusion as to which solution to follow. Current national debt policy and issue The United States (US) has a rising national or government debt (Nanto, 2011, p. 4), which in 2010 for example stood at $13.6 trillion (The Heritage Foundation et al., 2010) and in mid-2015 stood at $18.153 trillion (National Priorities Project, 2016). Combined with its future forecast (i.e. at $22.4 trillion by the end of this year of 2016, Chantrill, 2016) the national debt is unsustainable and the US is confrontedShow MoreRelatedUs National Debt1414 Words   |  6 PagesNational debt ceiling 101: Is a crisis looming? The Christian Science Monitor, Mark Trumbull, March 8, 2011, CSMonitor.com In this article, Mark Trumbull, a staff writer for The Christian Science Monitor, points out several different areas that the USA‘s National Debt crisis effects. Trumbull asks nine different questions about the debt crisis and then answer’s them as best as possible. His effort is to bring the words of this huge political battle from a high scope to the reading level of theRead MoreFinancial Crisis Of The United States951 Words   |  4 PagesFinancial Crisis in the United States American debt held by households is rising ominously, plus our economic policies change. That debt balloon powered by radical income inequality will become the next bust. It drives by spending on domestic demand or more likely consumer spending not just by the wealthy, but by everyone else. An important explaining about the unity that emerged from our latest research has shown as relatively that ten percent were prosperous, saving, and investment in which naturalRead MoreEconomic Depression and Recovery Essay1021 Words   |  5 Pagesas well as the people to respond with our choices that will help us grow and recover. 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The readily identification of debt crisis was Mexico’s inability to serve its outstanding debt of $80 billion debt. And the situation continue to worsen, and one year later, by October 1983, 27 countries owing $239 billion had reschedule debts or in the processRead MoreWall Street Journal Project1294 Words   |  6 PagesIn this article, the author describes why young workers are no longer looking for summer jobs nor are they being hired for summer work. This summer held the lowest number of young people who found work than any other year on record. â€Å"Fewer young Americans found jobs this summer than last year, but because some of them didn’t look for work† (Murray, S. 2011). 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Latin American countries