U.S. Budget Deficit - Good or Bad?
By: Yan • Essay • 1,627 Words • May 27, 2010 • 1,156 Views
U.S. Budget Deficit - Good or Bad?
U.S. Budget 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 depression of the 1890s, and World War I.
However, as soon as the war ended the deficit would be eliminated and
the economy which was much larger than the amounted debt would quickly
absorb it. The last time the budget ran a surplus was in 1969 during
Nixon’s presidency. Budget deficits have grown larger and more
frequent in the last half-century. In the 1980s they soared to record
levels. The Government cut income tax rates, greatly increased defense
spending, and didn’t cut domestic spending 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
12/31/1991 $3,801,698,272,862.02
12/31/1992 $4,177,009,244,468.77
12/31/1993 $4,535,687,054,406.14
12/30/1994 $4,800,149,946,143.75
10/31/1995 $4,985,262,110,021.06
11/30/1995 $4,989,329,926,644.31
12/29/1995 $4,988,664,979,014.54
01/31/1996 $4,987,436,358,165.20
02/29/1996 $5,017,040,703,255.02
03/29/1996 $5,117,786,366,014.56
04/30/1996 $5,102,048,827,234.22
05/31/1996 $5,128,508,504,892.80
06/28/1996 $5,161,075,688,140.93
07/31/1996 $5,188,888,625,925.87
08/30/1996 $5,208,303,439,417.93
09/30/1996 $5,224,810,939,135.73
10/01/1996 $5,234,730,786,626.50
10/02/1996 $5,235,509,457,452.56
10/03/1996 $5,222,192,137,251.62
10/04/1996 $5,222,049,625,819.53
*