Essay on The Economic Problems Of National Debt

1147 Words Oct 7th, 2016 5 Pages
There are three major economic problems we currently are experiencing in the United States
Government spending is expanding at an exponential rate. Unfortunately, the national debt continues to grow at breathtaking speed. President Obama has proposed a budget that would increase U.S. government spending to 5.6 trillion dollars in 2021. However, the value of the U.S. dollar has declined by over 95 percent. One reason for this decline is to help control inflation. In this report, we will analyze and synthesize the effects on the economy, and provide recommendations to help correct the negative effects on the economy.

The National Debt.

National debt is the total outstanding borrowings of a central government. National debt is divided generally into three categories:
(1) Floating debt, short-term borrowings such as treasury bills, borrowings from the central bank.
(2) Funded debt, short-term debt converted into long-term debt.
(3) Unfunded debt, national savings certificates, savings bonds, premium bonds, and securities repayable in foreign exchange. The U.S. Treasury divides all federal spending into three groups: (1) mandatory spending (2) discretionary spending and interest on a debt. (3) Mandatory and discretionary spending.

All federal spending and all of the government services and programs on which we rely on is paid by this system. Interest on debt, which is a much…

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