Economics: Today and Tomorrow © 2012

"Deficit and Debt"

Introduction
A budget deficit, as you learned in this chapter, occurs when government spending exceeds revenues. Between 1998 and 2001 the United States operated with a surplus rather than a deficit of funds. This turn of events, however, has not been typical of much of the nation's recent history, and the national debt continues to be an issue. How are budget deficits tied to the national debt, and how do surpluses affect our economy? Citizens can gain a better understanding of how the federal government allocates tax dollars in preparing the federal budget by going to the United States Office of Management and Budget Web site.

Destination Title: United States Office of Management and Budget Web site

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Directions
Start at the Office of Management and Budget Web site.

• Click on the link indicated for the most recent budget year.
• Browse through the site, taking notes as you go.

1			What was the budget forecast expected to be when this administration took control of the government?
2			How was a budget surplus achieved in the late 1990s?
3			What events caused the budget surplus to shift to a budget deficit?
4			How is the administration attempting to deal with the challenges of forecasting future revenue collections to enable better government budgeting?
5			Using your findings on deficits and the federal budget, prepare a television news broadcast reporting on the status of the budget and the national debt. Include information on the current deficit or surplus, the relationship between deficits and the debt, and efforts to reduce the national debt. Present your broadcast to the class.