What is a budget deficit? Well simply put, it is when you spend more money this month than your income. So instead of simply ceasing your spending,, you decide to borrow money, and now you have a deficit or a debt. Well, if you keep spending more than you earn and repeat this cycle over many months, before soon all you can do is pay for the interest on your loans. Therefore each month your debt is increasing, growing larger and larger. Until, one day your interest is more than you can borrow and you have to file for bankruptcy.

Why does our country, one of the richest nations in the world, have such an enormous debt? Our country had a repetition of annual deficits from about 1962 to 1997. In 1997 the Clinton administration and Congress managed to provide a surplus from 1998 to 2001. But after the events of September 11th our debt is growing

once again. The main causes of this new increase in deficit, is the expenditures on fighting terrorism, a war in Iraq, a recession, and a tax cut. Historically our country has been in debt for a very long time in 1791 we owed over 75 million dollars, by 1814 it was over 80 million. As we can see budget deficit is not a new problem that our nation is plagued with.

If the government was in surplus in 1998-2001 and actually started paying off the debt, then why is it now rolling in to unthinkable numbers? The answer is that recent events in the world have propelled the government’s need for spending. No one could of predicted the events of September 11th, and after war was declared on terrorism, money had to be found to pay for all the military needs. Likewise the same situation evolved in Iraq. All the missiles and supplies cost money, and so will the rebuilding of both Iraq and Afghanistan, neither will be cheap or easy. If all that wasn’t enough, the economy in 2002 was in a recession, to answer this problem President Bush proposed a tax cut. He projected that a tax cut would give the people extra money, extra money to put back into the economy. An idealistic approach, considering that money for the federal budget comes from taxes and therefore, cutting taxes can not help to bring the budget into a surplus.

The main problem is once we have a surplus, like in 1998-2001, is that we don’t go fa

Some topics in this essay:
Budget Deficit, Medicare Medicaid, Contemporary Issues, President Bush, Iraq Afghanistan, money government, federal budget, paying debt, public debt, tax cut, budget deficit, government surplus, proposed tax, extra money, instead simply, events september 11th,