The Existing US National Debt

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As reported by the Congressional Budget Office, the United States hit its last surplus in 2001.
From fiscal year 2001 to fiscal year 2009, federal government spending has increased by 6.
5% of Gross Domestic Product while the taxes declined by 4.
7% of GDP.
The federal government expenses increased due to the following:
  1. Medicare and Medicaid - 1.
    7 percent of GDP
  2. Defense - 1.
    6 percent of GDP
  3. Income Security including food stamps as well as other unemployment benefits - 1.
    4 percent of GDP
  4. Social Security - 0.
    6 percent of GDP
  5. Additional categories - 1.
    2 percent of GDP
Tax reductions were also made and the causes consist of individual income taxes with -3.
3 percent, payroll taxes with -0.
5 percent, corporate income taxes with -0.
5 percent, as well as other categories with -0.
4 percent when combined.
The government spending hit its highest level in 2009 in relation to the GDP in the past 40 years.
The tax receipts, on the other hand, were at its lowest in 2009 as well.
The United States national debt dramatically increased in 2001 when the CBO predicted that the annual surpluses will average at $850 billion from year 2009-2012 in estimate.
The average estimated United States national debt on the inclusive years reached about $1.
215 trillion.
The New York Times assessed the U.
S.
budget circumstance and classified the cause of the rise in the United States national debt into four categories which include:
  1. Decline on the business cycle - 37 percent
  2. Policies passed by the president - 33 percent
  3. Policies supported and extended by the next administration - 20 percent
  4. New policies from the new president - 10 percent
The information released by CBO is based on the law mandated today.
Therefore, the policy recommendations that aren't yet passed as a law aren't applicable in their analysis.
Presidents of the United States of America have no authority according to the constitution to carry on taxes or to spend money because this responsibility is assigned to the Congress.
However, the President's concerns and priorities may impact the Congress' decisions.
As stated in November 2009 by OMB Director Peter Orszag, the $9 trillion United States national debt forecast for 2010-2019 will be a result of existing programs from the past administration.
This also includes the tax cuts made in 2001 and 2003 and the Medicare Part D which was unfunded.
Other causes of the United States national debt may be the economic recession which may include reduction in tax income and additional expenditure for the social security and unemployment benefits.
The remaining amount could be used for bailout programs which will address the economic crisis.
As reported in April 2011 by the Pew Center, the shift in United States national debt was caused by the following:
  1. Recession which caused declines in revenues - 28 percent
  2. Increase in spending on defense - 15 percent
  3. Tax cuts in 2001 and 2003 - 13 percent
  4. Net interest increase - 11 percent
  5. Other government spending that are not related to defense - 10 percent
  6. Other cuts in taxes - 8 percent
  7. Obama stimulus - 6 percent
  8. Medicare Part D - 2 percent
  9. Other factors - 7 percent
Source...
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