THE NATIONAL DEBT

Question 1

What is the federal budget?

Answer 1

Money spent by the federal government every year.

Question 2

What is revenue?

Answer 2

Money collected by the government, mostly through taxes.

Question 3

What is a deficit?

Answer 3

Money the government spends in a year BEYOND what it gets in revenue that year.

Question 4

What is National Debt?

Answer 4

The total amount the government owes

Question 5

What is the U.S. Treasury Bond?

Answer 5

How the government borrows money! It sells bonds to people ( and foreign government ) and then pays them back after a certain number of years.

Question 6

Why is growing national debt a problem?

Answer 6

• if debt is owned by foreign powers, they can influence the U.S.
• Increase in debt interest payments = less money for other things… schools, roads, parks, etc.
• Higher debt could mean higher interest rates for the government to repay = more money spent on debt than other things.