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National Debt
National debt is the total amount that the federal government owes because of money it has borrowed by selling bonds or other securities. The national debt exists because the government’s expenditures often exceed its income from taxes. ...
Government debt differs from private debt because the government is not required to post any collateral (pledge of security) to guarantee payment. ...
The United States debt originated in the 1790’s when the newly established federal government assumed debts that the individual states had run up during the Revolutionary War. Wars have been by far the most common cause of increase in the United States National Debt. For example, the federal debt was only $1 billion before World War I (1914-1918). ... By the time World War II ended in 1945, the national debt had risen to about $259 billion. The Korean War in the early 1950’s and the Vietnam war in the 1960’s and early 1970’s caused the debt to rise sharply again. ... National Debt had risen to about 1. ...
Wars have also been responsible for high national debts in other countries. In 1867, the newly founded Dominion of Canada assumed the Canadian debt of $93 million. After increases caused chiefly by Canada’s participation in two world wars, the debt totaled about $19 billion in the mid-1940’s. By 1983, the Canadians national debt had risen to about $159 billion.
Public improvements also increase the national debt. ...
Over fifth of the national debt is held by various government agencies. However, banks and private individuals are the largest owners of the debt. ...
It is important to consider the national debt in relation to the national’s total economic strength. One way of doing this is to compare the national debt to the gross national product (GNP). ... For example, the United States national debt rose from $259 billion in 1945 to about $1.4 trillion in 1983, but the 1945 debt amounted to 122 percent of that year’s GNP, while the 1983 debt was only 42 percent of the 1983 GNP. ... They point out that, except for small portions of the debt held by persons in other countries, the size of the debt itself is not as important as the effects that increasing or decreasing the debt might have on the economy. Both groups usually agree that taxes in prosperous times should be high enough to cover government spending and to reduce the debt.
Those who call for a balanced budget would not favor measures that would increase the national debt if a recession occurred or threatened to occur, but members of the second group would urge government borrowing to pay for public improvements as a sound way to prevent or end recession. ... 8 trillion of new debt; that’s more than created in the nations entire history prior to 1990. Fiscal Year 2000 ended with the highest dollar debt in U. ... In fiscal year 2003 debt increased to $6. ... Each prior fiscal year also had a higher debt than the year before. By the end of fiscal year 2003 federal debt was $23,270 per child; a family of four shared $93.080 of federal government debt to impact their future standards of living, even before the kids enter kindergarten and, half of that was created in the 1990s where more than half of all federal debt was created in monies owed internationally, on top of the two largest tax increases in history.
Approximate Word count = 2655
Approximate Pages = 10.6
(250 words per page double spaced)
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