Textbook: Chapter 27, 28, 30 (free link to book at https://opentextbc.ca/principlesofeconomics/chapter/introduction/
Link (website): U.S. National Debt Clock https://www.usdebtclock.org
The federal debt is symptomatic of the nation’s persistent budget deficits as the national debt is the accumulation of budget deficits. Deficits grew steadily
during the Great Recession when there was a significant shortfall in government revenue, which required that the government pursue an expansionary fiscal
policy to stimulate the economy. The recession is now over, but the Trump administration, continues to pursue deficit spending. In a contribution to Forbes
magazine, Chuck Jones (2018) points out that the U.S. Federal deficit was $587 billion in Obama’s last year in office, and it grew to $666 billion in the first
year of Trump’s presidency. The Trump Administration’s Tax Reform plan and the two-year bipartisan budget, which passed in February 2018, are estimated,
by many accounts, to cause the federal deficit to exceed 1 trillion dollars by 2020 (Jones, 2018). The implication of this growing deficit is a further increase in
the national debt.
From 1965 to through 2019, there has been a persistent increase in the federal debt. This trend became more pronounced during (and in the aftermath of)
the recession of 2008-2009. As shown on Figure 1, in September of 2017, for example, the national debt rose to 20.24 trillion U.S. dollars. This disturbing
increase in the federal debt is likely to increase the per capita debt burden for each American citizen. According to Statistica (2018), if the debt owed in 2016
were distributed to every American citizen, the amount owed per capita would be 60,470 U.S. dollars. The current figure is available at the U.S. National Debt
As the U.S. federal debt increased over the years, so did the federal debt as a percentage of GDP. From 1965 to 2018, there has been a general increase in the
federal debt as a percentage of GDP. Remarkably, this increase was very pronounced during (and in the aftermath) of the recession of 2008-2009, after a
brief decline from 1995 to 2002. As shown on Figure 2, in the fourth quarter of 2017, the Debt to GDP ratio was 104%. The ratio compares what the U.S. owes
to what it produces, and it serves as an indication of the U.S.’s ability to pay its debt. This number can also be interpreted as the number of years it would
take for the U.S. to pay back its debt if the nation’s GDP is used entirely to pay back its debt (Statistica, 2018).
Initial Post Instructions
For the initial post, address the following:
Do you agree that the constitution should be amended to include a balanced budget requirement? Why or why not?
If you agree with a constitutional amendment, can you identify one reason why some people may be opposed to it? What proposals would you make to allay
the concerns of those people?
If you disagree with a constitutional amendment, can you identify a line of argument – made by the proponents of the constitutional amendment – that you
find compelling? What do you find persuasive about that line of argument?
Minimum of 2 sources cited (assigned readings and an outside scholarly source)
APA format for in-text citations and list of references