The Role of Government: The National Debt vs. The Deficit
This lesson printed from:
Posted November 20, 2000
Author: Marty Yopp
Posted: November 20, 2000
This lesson defines and compares the National Debt with the National Deficit. Students will discover the differences between the two and look at current trends. Students will examine the amount of per-capita debt and be exposed to the reality of the amount the national debt is increasing every day or two despite recent budget surpluses.
- Define and describe the national debt.
- Define and describe the federal budget deficit and differentiate that from the national debt.
- Learn that the national debt currently increases by over $500 million every day and by more than $1 Billion every 48 hours.
- Look at other critical data to determine whether the interest on the national debt is increasing or decreasing.
- Define and describe budget surpluses.
Visit the website www.federalbudget.com and respond to the following questions or statements:
Define the national debt. [The national debt is debt held by the government plus debt held by the public.]
Describe debt held by the government. [Debt held by the government includes Social Security, civil Service Retirement, Military Retirement, Medicare, Unemployment Insurance, and the Highway and the Airport, the Airway Trust Funds.]
Describe debt held by the public. [Debt held by the public is issued by the federal government and held by nonfederal investors including the Federal Reserve. This is the financial liability for the government's borrowing which results in interest paid out.]
Did the United States have a federal deficit or surplus in 1998? Approximately how much? [The United States had approximately a $70 billion surplus in 1998.]
When does the fiscal year for the United States Government begin and end? [The fiscal year for the United States Government begins October 1st and ends September 30th.]
When, before 1998, did the United States Government have a surplus? [The United States Government had a surplus of $3.2 billion in 1969.]
Approximately how much does the national debt increase every day? [The national debt increases approximately $536 million every day.]
Approximately how much does the national debt increase in less than two days?[The national debt increases approximately $1 billion in less than two days.]
Has the interest on the national debt been increasing or decreasing in the past two years? [The interest paid has been decreasing in the past two years.]
What is the difference between the national debt and the federal deficit? [The national debt accumulates over time. The deficit, or surplus, is measured for the fiscal year in which it occurs.]
- What else did you learn from this lesson? [Answers will vary.]