National Debt Essay Example
National Debt: It is Not Just a Number, It is Our Future
Miranda Rosenbaum
Macroeconomics
Professor C. Simkonis
April 29, 2008
Rosenbaum 1
As a nation, America has accumulated a tremendous amount of debt which will affect not only the lives of the current citizens, but generations thereafter. Currently, the United States public debt is approximately $9.5 trillion, in long form, that’s $9,500,000,000,000. This ridiculous amount of money is a historical accumulation of misappropriated surpluses and exacerbated deficits. It is important for American citizens to not only understand the national debt concept, but also understand the causes and effects that lead to this point and what action we as Americans must prepare to do in order to significantly reduce this outrageous mistake. In order to understand the concept of national debt, it is important to know exactly where the money is derived. The funds owed by the United States federal government are either private (external) or public funds. If the funds are private, they are owed to foreigners in the form of securities such as Treasury Bills, Notes, Bonds, TIPS, Savings Bonds, and the State and Local Government Series securities. If the funds are owed by the public that means that large American corporations have purchased these securities and therefore America owes these corporations that amount plus interest. In addition to securities and bonds, the US federal government receives income through taxes. The Internal Revenue Service manages the financial portion the government receives from citizens and helps determine the surplus/deficit budget. These funds are used to improve homeland security, Medicare/Medicaid, Welfare programs, and Unemployment issues among other Rosenbaum 2 government programs. When the expenses of the US Government exceed the revenue collected, it issues new debt to cover the deficit. This debt
Miranda Rosenbaum
Macroeconomics
Professor C. Simkonis
April 29, 2008
Rosenbaum 1
As a nation, America has accumulated a tremendous amount of debt which will affect not only the lives of the current citizens, but generations thereafter. Currently, the United States public debt is approximately $9.5 trillion, in long form, that’s $9,500,000,000,000. This ridiculous amount of money is a historical accumulation of misappropriated surpluses and exacerbated deficits. It is important for American citizens to not only understand the national debt concept, but also understand the causes and effects that lead to this point and what action we as Americans must prepare to do in order to significantly reduce this outrageous mistake. In order to understand the concept of national debt, it is important to know exactly where the money is derived. The funds owed by the United States federal government are either private (external) or public funds. If the funds are private, they are owed to foreigners in the form of securities such as Treasury Bills, Notes, Bonds, TIPS, Savings Bonds, and the State and Local Government Series securities. If the funds are owed by the public that means that large American corporations have purchased these securities and therefore America owes these corporations that amount plus interest. In addition to securities and bonds, the US federal government receives income through taxes. The Internal Revenue Service manages the financial portion the government receives from citizens and helps determine the surplus/deficit budget. These funds are used to improve homeland security, Medicare/Medicaid, Welfare programs, and Unemployment issues among other Rosenbaum 2 government programs. When the expenses of the US Government exceed the revenue collected, it issues new debt to cover the deficit. This debt