One of the most controversial public policy issues in recent decades is the size and growth of the U.S. budget deficit and public debt. Discuss where we are, compared to other countries, and how we got here

Answer 1

Over the past few decades, the amount of public debt, both internal (owed to lenders within the U.S.) and external (owed to foreign lenders) have grown rapidly. In fiscal year 2014, the U.S. federal budget deficit amounted to about 3.7% of GDP, higher than in several other wealth nations, but not all. Canada's deficit was about 3% of GDP, Sweden's was 2% of GDP, but Japan's deficit was nearly 8% of GDP. During the recession, in 2009, the deficit was 10% of GDP, a shocking figure. As of 2014, it's down to about 3.7%.

But perhaps more significant, because the federal government has run budget deficits almost every year, the U.S. government has accumulated a net national debt of almost 60% of GDP. Although this sounds incredibly high, it is actually lower than the percentage of many fiscally healthy countries, and of course, much smaller than that of troubled countries like Greece, Iceland and Ireland.

Still, the debt amounts to $10 trillion dollars - a great deal of money. The debt was incurred over many years, when tax collections did not bring in enough to pay for such federal expenditures as national defense, health care (mostly Medicare and Medical) and other entitlement programs (mostly Social Security). These deficits must be covered by borrowing, which incurs more debt. Since the Great Recession of 2008-2009, this chronic budget gap widened considerably, while tax revenue shrunk, because so many workers lost their jobs. As a result, the federal government debt grew faster than GDP.