Topic > budget deficit - 1587

"It's time to clean up this mess." The last words uttered by many different politicians when talking about public debt and the budget deficit are famous. Our debt currently stands at $4.41 trillion and we have a budget deficit of approximately $300 billion and growing. Our government now estimates that by 2002 the debt will be $6.507 trillion. While our politicians talk about balancing budgets, none of them have proposed a feasible plan to begin paying off the debt. In the early days, our public debt was considered a last resort. In 1790, when Alexander Hamilton, as Secretary of the Treasury, made his first report on the national debt of the United States, he estimated it at close to $70 million. By 1840, after alternating peaks and valleys, the debt amounted to only $4 million, or 21 cents per capita. This is the lowest point ever reached by US public debt. After 1840 it peaked in the last year of the Civil War, of nearly $2.68 billion and a per capita figure of $75.01. The only justification for a significant amount of debt was a war. By 1900 this figure had been reduced to less than $1 billion. By 1919, at the end of World War I, the debt had risen to $25.5 billion. In each of the following years the debt was reduced and by 1930 it amounted to $18.1 billion. With the collapse of Wall Street in 1929, the country (debt history: 1850 to 1950) fell into the Great Depression, which lasted until 1940. By that time the debt had risen to $51 billion. At the end of World War II the debt amounted to $269 billion. Again the government worked to reduce the debt, and in 1949 it stood at $252.7 billion. At that point the Korean War began, which brought the debt to $274 billion by 1955. Since then, there has been no serious effort to repay the debt. The main point to highlight is that on three separate occasions a major debt reduction effort has been made, but in the last 55 years, despite many efforts, similar results have not been achieved. loans, negotiable and non-negotiable. The first provides approximately 52% of the total and is made up of bills of exchange, banknotes and negotiable bonds; the latter include U.S. savings bonds, securities owned by foreign governments, and redeemable but nonmarketable government securities. The maturity of this debt varies from less than a year to ... half of the document ......BIBLIOGRAPHY www.census.gov/foreign-trade/top/dst/2004 and 2003 and 2002/deficit. htmlThe cost of the loan. The economist; December 15, 2004 Gale, William G. and Orszag, Peter R. The U.S. Budget Deficit: On an Unsustainable Path. New Economy, December 2004. Gramlich, Governor Edward M., speech at the Isenberg School of Management Seminar Series, Amherst, Massachusetts, May 14, 2004; www.federalreserve.gov/boarddocs/speeches/2004/20040225/default.htmGriswold, Daniel T., associate director, Center for Trade Policy Studies, The Cato Institute, July 22, 1998; www.freetrade.org/pubs/speeches/ct-dg072298.html www.investorwords.com/601/Deficit.html; WebFinance, Inc., 1997-2005 www.investorwords.com/5020/trade_deficit.html; WebFinance, Inc., 1997-2005Eisner, Robert. How real is the federal deficit? New York, The Free Press, 1986. Federal Reserve System. World book encyclopedia. vol. 7, 67-68, 1988. Rukeyser, Louis. What lies ahead for the economy: the challenge and the change. New York, Simon and Schuster, 1983.Segalstad, Eric V. Determinants of the Interest Rate. October 1997. Sims, C., Comparing Interwar and Postwar Business Cycles: Monetarism Reconsidered. American Economic Review, 1980.