Sofia Bruzual Marin

FM 116 25D

1. What is the Federal Budget Deficit?

The Federal Budget Deficit is the difference between the expenses made by the
government and the income generated (from taxes or any other sources).

2. What is the current value of the Federal Deficit?

According to the article “Budget Deficit on Path to Surpass $1 Trillion Under

Trump” (Tankersley and Cochrane, August 21th 2019) the Federal Deficit was
expected to reach the $960 billion by the end of the 2019 Fiscal Year, but as
reported in other article titled “Federal budget deficit hits $1T through 11 months
of 2019 fiscal year” (Krishan, September 9 th 2019) the Deficit has already hit that
number, which is $168 billion greater than one year ago.

3. Name 4 causes of the current rise in the Federal Deficit as described in

the article?

 The tax cut policies (if the taxes are reduced that means less income or
revenue going to the Federal Budget).

 The White House is spending this money; Trump’s government is about

to set new records in defense spending (expected to be around $989
billion).

 The tariffs imposed by the government on most Chinese products

(which caused the current Trade War between these countries) may
slow down the economic growth resulting in less money going to the
Federal Budget.

 Reducing the deficit amount has not been a priority to the government;
instead it has prioritized plans or ideas that may add to that debt.
4. What is a reason that it has not risen further?

The Federal Deficit has not raised any further thanks to the low value of
interest rates (they decrease the amount of money that has to be paid to the
lenders).

5. Is the Federal Deficit a problem for the economy? Why?

Yes it may be. When the Federal debt is excessive the owners get worried they
will not get their money back; in this case government normally starts working on
new ways to lower the Deficit (which is not currently prioritized in the USA).
When the spending exceeds the revenue for a long period of time in a healthy
economy, it is put on danger of getting to an economic downturn, ending in a
recession.
 Citations

 Amadeo, K. (2019, May 8). 3 Reasons the US Deficit Is Out of Control.

Retrieved from https://www.thebalance.com/current-u-s-federal-budget-
deficit-3305783

 Amadeo, K. (2019, May 6). Why US Deficit Spending Is Out of Control.

Retrieved from https://www.thebalance.com/deficit-spending-causes-
why-it-s-out-of-control-3306289

 Borak, D. (2019, July 12). US budget deficit jumps 23.1% over last year as
debt crisis looms. Retrieved from
https://www.cnn.com/2019/07/11/politics/treasury-us-budget-deficit-
widens/index.html

 Horsley, S. (2019, August 21). The Federal Budget Deficit Is Getting Bigger
As Spending Grows. Retrieved from
https://www.npr.org/2019/08/21/753112635/the-federal-budget-
deficit-is-getting-bigger-as-spending-grows

 Investopedia. (2019, August 14). The National Debt Explained. Retrieved

from https://www.investopedia.com/updates/usa-national-debt/

 Kelly, M., & Williams, C. (2018). BUSN¹⁰: introduction to business(10th ed.).

Boston, MA: Cengage Learning.

 Krishan, N. (2019, September 10). Federal budget deficit hits $1T through
11 months of 2019 fiscal year. Retrieved from
https://www.washingtonexaminer.com/policy/economy/federal-budget-
deficit-hits-1t-through-11-months-of-2019-fiscal-year

 Suderman, P. (2019, August 13). We've Already Blown Past Last Year's
Federal Budget Deficit. Retrieved from
 https://reason.com/2019/08/13/weve-already-blown-past-last-years-
federal-budget-deficit/

 Tankersley, J., & Cochrane, E. (2019, August 21). Budget Deficit on Path to
Surpass $1 Trillion Under Trump. Retrieved from
https://www.nytimes.com/2019/08/21/us/politics/deficit-will-reach-1-
trillion-next-year-budget-office-predicts.html?searchResultPosition=1

 (n.d.). The Current Federal Deficit and Debt. Retrieved from

https://www.pgpf.org/the-current-federal-budget-deficit