Budget Surpluses (Revenues Exceed Expenses)
Read this section to learn about budget surpluses. It is pretty unlikely that the United States will see a budget surplus in the near future. This situation is present when the tax revenues collected are greater than the expenses of the United States government. Complete the exercise at the end of the section.
The National Debt
If, in any given year, the government takes in more money (through taxes) than it spends on goods and services (for things such as defense, transportation, and social services), the result is a budget surplus. If, on the other hand, the government spends more than it takes in, we have a budget deficit (which the government pays off by borrowing through the issuance of Treasury bonds). Historically, deficits have occurred much more often than surpluses; typically, the government spends more than it takes in. Consequently, the U.S. government now has a total national debt of more than $14 trillion.
As you can see in Figure 1.13 "The U.S. National Debt, 1940–2010", this number has risen dramatically in the last sixty-five years. The significant jump that starts in the 1980s reflects several factors: a big increase in government spending (especially on defense), a substantial rise in interest payments on the debt, and lower tax rates. As of this writing, your share is $46,146.21. If you want to see what the national debt is today – and what your current share is – go on the Web to the U.S. National Debt Clock.
Figure 1.13 The U.S. National Debt, 1940–2010
