Macro Economics

Macro Economics

Outline

Three large concerns in today's economy are the federal budget deficit, gross domestic product (GDP), and government spending. The federal budget deficit is a political financial plan proposed by the president on how to get the nation out of debt. The GDP is the value of economic production. Government spending is how political figures spend the nation's money, including tax dollars and government revenue. These three issues are intricately linked and provide information on the nation's projected economy. In the newspaper article "Federal deficit below last year's record" (2005), Andrew Taylor reviews the American government's numbers and what they means for the nation's economic future.

Article Summary

Andrew Taylor states, "The federal deficit hit $319 billion for the budget year just ended; down from last year's record red ink though a surge in Katrina-driven spending threatens to drive it up again" (2005, para 1). He goes on in the article to discuss improvements and an estimate of America's spending. There are many reasons for the changes in the projections, including the timing of the fiscal year and the natural disasters that occurred. A couple of the natural disasters, including hurricanes Katrina and Rita occurred in 2004, but the spending required to recover from those disasters has just begun. Now the nation has to project what is going to be spent in future years and what that means to the economy and the national debt.

[Federal Debt (Accumulated Deficit)]

Taylor uses quotes, monetary figures, and percentages to discuss the federal deficit and how government spending is related to today's economy, including economic growth, job production, and tax decreases. He explains some of the reasons behind the deficit, according to Congress and political parties. He also discusses past projections and goals. He concludes his article by stating the future goals of the White House in regards to spending. Andrew Taylor speaks to the point, apparently trying not to be negative, but with an overall gloomy outlook for the monetary projections.



[this graph shows the last year's budget deficit that would once again top one trillion dollars.]

Economic Topics

Federal Deficit

The deficit impacts many economical processes, including taxation, inflation, and spending. The federal deficit is the outcome of the government's spending more money than its income allows. Every time the government is required to borrow money in order to spend, the deficit grows. The government's source of income is tax revenue. To decrease the ...