Vocabulary
When government takes in more than it spends
Budget Surplus
Mature in 20 years and are available in both small and large denominations from $25 up to $10,000
Savings Bonds
Cayman Islands debt value
485 million dollars
Borrow Money
When government spends more than it takes in
Budget Deficit
Short-term bonds that mature in less than one year
Treasury Bills
The Unites States debt value
30 trillion dollars
The longer the maturity date
the higher the interest
the total amount of money that the government owes
National Debt
Treasury Notes
Negative Effects of Deficit Spending
Debts can increase and increases the need for taxes
Examples of Government Trust Funds
Social Security, Medicare, Medicaid, Government Pension Funds
When a government spends more than it collects in revenue for a specific budget year
Deficit Spending
a long-term bond that matures in 30 years
Treasury Bonds
Positive Effects of Deficit Spending
Jobs are created and public goods are improved
funds put aside for specific purposes to be used in the future
Trust Fund
What happens when the government outbids private bond interest rates to gain loanable funds
Crowding-Out Effect
Three types of bonds issued by the Department of the Treasury
Treasury Bills, Treasury Notes, Treasury Bonds
Causes of Deficit Spending
National Emergencies, Need for Public Goods and Services, Stabilization of the Economy, Role of Government in Society
What the government can do to get people to lend them money
Issue Bonds