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Knowledge Base

The Economy and The Deficit

Where can I find the most recent Federal Budget?

The most recent Federal Budget can be found on the White House website.

The Budget Process video refers to transfer payments as a type of spending. What are transfer payments and what do they include?

Transfer payments are payments made without any exchange of goods or services. Some examples include unemployment assistance, nutritional aid, health and welfare payments, and temporary tax cuts.

What was the Budget Control Act and where can I learn more about it?

President Obama signed the Budget Control Act into law in 2011 which allowed an increase in the debt limit and included provisions to restrict spending in order to reduce the budget deficit. To learn more about the effects of the Budget Control Act see the CRS report The Budget Control Act of 2011 as Amended: Budgetary Effects.

Is the US involvement in wars the reason for our high debt?

Historically speaking, war has increased US debt. For instance, there was significant growth in the 1940s directly associated with World War II spending. Today’s debt includes wartime expenditures, but also includes many other factors such as Medicare and Social Security which play an even larger role in CBO’s projected future debt.

What is the current US debt?

The current debt is around $19 trillion. For an exact debt count see the US Debt Clock.

Who owns the US debt?

American entities own most of the US debt ($13 trillion). All foreign countries combined own about $6 trillion of US debt as of March 2016. Compared to the other countries that own US debt, China owns the most ($1.2 trillion) and Japan the second most ($1.1 trillion).

What is the US deficit?

CBO’s deficit projection for FY 2016 is $534 billion.

Why is potential GDP important?

Observing the difference between GDP and potential GDP one can see the output gap, which policymakers use to determine whether or not to increase or decrease monetary stimulus into the economy.