The Pardu

The Pardu
Watchful eyes and ears feed the brain, thus nourishing the brain cells.

Thursday, May 1, 2014

Connect The Dots USA: Spending Vs. Revenue

Connect The Dots USA Information that feeds the brain will providing a basis for good decision-making.

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Connect The Dots USA
 April 25

A “deficit” is when the government spends more than it takes in in a given fiscal year (Oct 1st of year preceding to Sept 30th). A “surplus” is just the opposite. All the deficits added together is the long-term “debt.” Think of the debt as the country’s credit card balance.

Here we see federal spending (the red line) vs. revenue (the yellow line) as a percentage of Gross Domestic Product (value of all goods, services, exports created annually) going back to 1940. The more the red line is above the yellow line, the greater the deficit is for that year. When the yellow line is above the red line, that indicates a surplus for that year.

During WWII, we had huge deficit spending, but we got it under control because back then even Republicans like Eisenhower knew it was irresponsible to cut taxes until the budget was balanced and debt paid off.

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