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      "title": "Deficits, Debt, and the Economy: An Introduction",
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      "id": 596327,
      "date": "2019-04-15",
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      "title": "Deficits, Debt, and the Economy: An Introduction",
      "summary": "The federal government incurs a budget deficit when its total outgoing payments (outlays) exceed the total money it collects (revenues). If instead federal revenues are greater than outlays, then the federal government generates a surplus. Deficits are measured over the course of a defined period of time\u2014in the case of the federal government, a fiscal year.\nDebt measurements may be taken at any point in time, and represent the accumulation of all previous government borrowing activity from private citizens, institutions, foreign governments, and other parts of the federal government. Federal debt increases when there are net budget deficits and outflows made for federal credit programs, which combine to represent debt held by the public. Federal debt also rises through increases in intragovernmental debt, which is generated by trust fund surpluses that are used to finance other government activity. Federal debt declines when there are budget surpluses, a reduction in the federal credit portfolio, or decreases in intragovernmental borrowing.\nFederal deficit and debt outcomes are interdependent: budget deficits increase federal debt levels, which in turn increase future net deficits. The nature of the relationship between deficits and debt varies depending on the type of debt considered. Budget deficits are the principal contributor to debt held by the public. The effect of deficits on intragovernmental debt is less certain than their contribution to debt held by the public. All else equal, increases in net trust fund deficits will lead to increases in total budget deficits but decreases in intragovernmental debt. \nInterest payments made on publicly held debt instruments contribute directly to federal deficits. Holders of federal debt are compensated by receiving interest payments from Treasury. Intragovernmental debt does not contribute to future deficits.\nPersistent budget deficits and a large and increasing federal debt have generated discussions over the long-term sustainability of current budget projections. Federal budget deficits declined from 9.8% of gross domestic product (GDP) in FY2009 to 2.4% of GDP in FY2015, and subsequently increased to 3.8% of GDP in FY2018. Recent estimates forecast that the government will run deficits in every year through FY2029.\nFederal debt totaled $21.516 trillion at the end of FY2018, which as a percentage of GDP (106.0%) was its highest value since FY1947; of that debt, $15.761 trillion (or 77.8% of GDP) was held by the public. \nOver time, persistent budget deficits can hamper economic growth. Deficits represent an intertemporal transfer from later generations to the current one, as money borrowed now will eventually require repayment with interest. The effect of deficit financing on economic output depends on the nature of the government activity being financed and the private activity that would have otherwise taken place.\nFederal debt is constrained by the willingness of investors to finance borrowing. While the amount of federal borrowing investors will finance may be affected by economic growth and other factors, real federal debt cannot increase indefinitely. There are no signs that federal borrowing capacity will be exhausted in the short term. However, the consequences of exhausted fiscal space may be worth considering when examining the medium- and long-term trajectory of the federal budget.",
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          "name": "Fiscal Policy & the Budget"
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      "source": "EveryCRSReport.com",
      "id": 585820,
      "date": "2017-11-21",
      "retrieved": "2018-10-02T15:33:02.440930",
      "title": "Deficits and Debt: Economic Effects and Other Issues",
      "summary": "The federal government incurs a budget deficit (also known as a net deficit) when its total outgoing payments (outlays) exceed the total money it collects (revenues). If instead federal revenues are greater than outlays, then the federal government generates a surplus. Deficits are measured over the course of a defined period of time\u2014in the case of the federal government, a fiscal year.\nDebt measurements may be taken at any point in time and represent the accumulation of all previous government borrowing activity, from private citizens, institutions, foreign governments, and other parts of the federal government. Federal debt increases when there are net budget deficits and outflows made for federal credit programs, which combine to represent debt held by the public. Federal debt also rises through increases in intragovernmental debt, which is generated by trust fund surpluses that are used to finance other government activity.\nFederal budgeting practices create a system where deficits and debt are interdependent: budget deficits increase federal debt levels, which in turn increase future net deficits. The nature of the relationship between deficits and debt varies depending on the type of debt considered. Budget deficits are the principal contributor to debt held by the public. \nThe contribution of deficits to intragovernmental debt is less certain than their contribution to debt held by the public. All else equal, increases in net trust fund deficits will lead to increases in total budget deficits but decreases in intragovernmental debt. \nThe interest payments made on publicly held debt instruments contribute directly to federal deficits. Holders of federal debt are compensated by receiving interest payments from Treasury. Intragovernmental debt does not contribute to future deficits.\nThe combination of persistent budget deficits and a large and increasing federal debt has generated discussions over the long-term sustainability of current budget projections. Federal budget deficits have declined from 9.8% of gross domestic product (GDP) in FY2009 to 3.5% of GDP in FY2017. However, recent estimates forecast that the government will run deficits in every year through FY2027. Federal debt totaled $20.245 trillion at the end of FY2017, which as a percentage of GDP (105.9%) was its highest value since the end of World War II. There was $14.673 trillion (or 76.7% of GDP) in debt held by the public at the end of FY2017.\nOver time, persistent budget deficits can hamper economic growth. Deficits represent an intertemporal transfer from later generations to the current one, as money borrowed now will eventually require repayment with interest. Federal debt, either publicly held or intragovernmental, is funded through private capital. In the absence of federal debt, a portion of such funding would likely have been used on private investment projects that could increase the future productive capabilities of the economy. Large or rapidly increasing debt levels could also make the economy more susceptible to a recession, although that dynamic has not manifested itself in the United States.\nFederal debt is constrained by the willingness of investors to finance borrowing. While the amount of federal borrowing investors will finance may be affected by economic growth and other factors, real federal debt cannot increase indefinitely. There are no signs that such \u201cfiscal space\u201d will be exhausted in the short term. However, the consequences of exhausted fiscal space may be worth considering when examining the medium- and long-term trajectory of the federal budget.",
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      "date": "2016-02-17",
      "retrieved": "2016-04-06T17:09:46.400495",
      "title": "Deficits and Debt: Economic Effects and Other Issues",
      "summary": "The federal government incurs a budget deficit (also known as a net deficit) when its total outgoing payments (outlays) exceed the total money it collects (revenues). If instead federal revenues are greater than outlays, then the federal government generates a surplus. Deficits are measured over the course of a defined period of time\u2014in the case of the federal government, a fiscal year.\nDebt measurements may be taken at any point in time and represent the accumulation of all previous government borrowing activity, from private citizens, institutions, foreign governments, and other parts of the federal government. Federal debt increases when there are net budget deficits and outflows made for federal credit programs, which combine to represent debt held by the public. Federal debt also rises through increases in intragovernmental debt, which is generated by trust fund surpluses that are used to finance other government activity.\nFederal budgeting practices create a system where deficits and debt are interdependent: budget deficits increase federal debt levels, which in turn increase future net deficits. The nature of the relationship between deficits and debt varies depending on the type of debt considered. Budget deficits are the principal contributor to debt held by the public. \nThe contribution of deficits to intragovernmental debt is less certain than their contribution to debt held by the public. All else equal, increases in net trust fund deficits will lead to increases in total budget deficits but decreases in intragovernmental debt. \nThe interest payments made on publicly held debt instruments contribute directly to federal deficits. Holders of federal debt are compensated by receiving interest payments from Treasury. Intragovernmental debt does not contribute to future deficits.\nThe combination of persistent budget deficits and a large and increasing federal debt has generated discussions over the long-term sustainability of current budget projections. Federal budget deficits have declined from 9.8% of gross domestic product (GDP) in FY2009 to 2.5% of GDP in FY2015. However, recent estimates forecast that the government will run deficits in every year through FY2026. Federal debt totaled $18.922 trillion at the end of calendar year 2015, and as a percentage of GDP is at its highest value since the end of World War II; $13.673 trillion of that debt was held by the public.\nOver time, persistent budget deficits can hamper economic growth. Federal debt, either publicly held or intragovernmental, is funded through private capital. In the absence of federal debt, a portion of such funding would likely have been used on private investment projects that could increase the future productive capabilities of the economy. Large or rapidly increasing debt levels could also make the economy more susceptible to a recession, although that dynamic has not manifested itself in the United States.",
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