Concepts
- Deficit vs. National Debt
- Federal Budget
- Budget Deficit
- Gov’t Issues Bonds (Sells Bonds) to Borrow
- Deficit’s Impact on Interest Rates (Crowding Out)
- Deficit’s Impact on Inflation
- Balanced Budget
- Impact on National Debt (None)
- Impact on Automatic Stabilizers (Lose Effectiveness)
- Budget Surplus
Overview
The budget deficit details how much money the government has to borrow in a given year, while the national debt is the running total of all the money the government owes. In other words, the national debt is the sum of all the deficits and surpluses the government has accumulated throughout its history (plus the interest owed on the money borrowed). In this lesson we will learn about what it means when the government runs a budget surplus, a budget deficit, or a balanced budget. We will also learn the implications of these scenarios on different aspects of the economy including the national debt.
Materials
Lecture
Video Coming at Later Date
Quiz
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