Econ Paper

The Budget Deficit
Robert Vincent
ECON 202
Professor Bergan
September 3, 2012

The national deficit is a growing problem in the present day. It is nevertheless acquire worse, and nothing is being done to fix it. Each and every(prenominal) second our deficit grows, and there is no end in sight. Since 1980 the deficit has handsome enormously. Some say its a bad thing, and predict impending doom, others say it is a respectable and stable necessity to maintain a healthy economy. When the U.S. political relation came into existence and for about 150 years thereafter the organization managed to keep a balanced budget. The only terms a budget deficit existed during these first 150 years were in times of war or other catastrophic events (Mishkin 2010). The presidency, 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 (Rosen 2005).
The snuff it time the budget ran a surplus was in 1969 during Nixons presidency. Budget deficits have grown larger and more general in the last half-century. In the 1980s they soared to record levels.



The Government cut income tax rates, greatly increased defense spending, and didnt cut domestic spending enough to make up the difference. Also, the deep recession of the early 1980s reduced revenues, superlative 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 (Rosen 2005).
Federal spending has grown over the years, especially starting in the 1930s in actual dollars and in proportion to the economic GDP. Beginning with the unseasoned Deal in the 1930s, the Federal Government came to play a...If you postulate to get a full essay, order it on our website: Orderessay



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