National Debt and Deficit

EQ: What role does the national debt have? What is monetary policy?

Definitions:

National Debt - 33 trillion

Budget Surplus - pos. difference btw gov’t spending and revenue (per year)

Budget Deficit - neg. difference gov’t spending and revenue (per year)

National Debt - the total amount of money a gov’t owes

Notes:

• Reducing Deficits - reducing spending + increasing revenues

  • Create Money (Reduce Deficits) - ‘create’ money to give to banks or print money; printing too much too fast leads to hyperinflation

  • Borrowing Money (Reduce Deficits) - adds to national debt

• Gov’t Borrowing

  • Treasury Bills - short-term bonds w/ maturity dates of 26 weeks or less

  • Treasury Notes - terms of 2-10 years

  • Treasury Bonds - matures 30 years after issue