U.S. on Track to Add $19 Trillion in New Debt Over 10 Years

EconEye Admin

3 years ago

The United States will add $19 trillion to its national debt over the next decade. The Congressional Budget office projects a $1.4 trillion budget gap this year. Over the following 10 years, tax receipts will fail to keep pace with the rising costs of Social Security and Medicare benefits.—nytimes.com

Answer the following questions to check your understanding of the story.

1) What is the $1.4 trillion budget gap in the news clip?

The $1.4 trillion budget gap is the government budget _____________.

a) surplus, the amount by which personal income taxes exceed Social Security and Medicare payments

b) deficit, the amount by which Social Security and Medicare payments exceed personal income taxes

c) deficit, the amount by which government outlays exceed government receipts

d) deficit, the amount by which government receipts exceed government outlays

Wrong! - How is the government budget balance determined?

Correct! - The $1.4 trillion budget gap is the government budget deficit—the amount by which government outlays exceed government receipts. Government receipts are forecast to be $1.4 trillion less than government outlays.

2) Why is the United States on track to add $19 trillion in new debt over 10 years?

The United States is on track to add $19 trillion in new debt over 10 years because over that period, the sum of all ____________ is forecast to be $19 trillion larger than the sum of all ____________.

a) Social Security and Medicare payments plus interest payments on the debt; personal income taxes

b) budget deficits plus interest payments on the debt; budget surpluses

c) Social Security and Medicare payments; personal income taxes

d) budget deficits; budget surpluses

Wrong! - Why would the government debt increase by $19 trillion over 10 years? How is the government debt calculated?

Good Job! - The government debt is the sum of past budget deficits minus the sum of past budget surpluses. To add $19 trillion in new debt, the sum of all budget deficits over 10 years is forecast to be $19 trillion larger than the sum of all budget surpluses.

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