Mr.

Hale
11/25/2015
The Four Deficits

In the movie I.O.U.S.A., David Walker spoke about the four deficits: the federal budget
deficit, the savings deficit, the trade deficit, and the leadership deficit. The four deficits
are related and matter because reduced national savings jeopardizes the future strength of
the U.S. economy and standards of living. These deficits are important because they are
the result of choices that are being made by people of this generation.
The federal budget deficit is the financial shortage of the federal government
budget. More money is being spent than what is coming in meaning taxes and other
income. In the late 1990s we had all the money we needed to function properly and then
in 2001 our fiscal outlook has deteriorated dramatically. Today’s budget deficits
represent negative public saving that directly subtracts from our national savings and
therefore the size and strength of the U.S. economy.
The savings deficit means that people are spending more than they are making. In
the long that has a negative effect because they have no money in savings and cannot
provide for their families future. The growth in the economy is suppressed due to the fact
that people do not save money.
The trade deficit is the negative balance of trade in which this country’s imports
are exceeding its exports. The U.S. is buying more goods and services from other
countries than it produces and sells to other countries. The future generations will be
paying back bills to other countries for years to come.
The leadership deficit is when our leaders in the public of the U.S. economy have
allowed the other deficits to occur because they we profitable courses to take. Politicians
are making promises they cannot keep like lowering taxes and public spending. Public
leaders should be held responsible for their action that is the only way to correct the U.S.
leadership deficit.