Federal Deficit & Debt

Definitions, measurement, history of deficit, politics, theories on causes & effects, inflation, taxation & spending, corporate welfare.

Recent years have brought about an interest in the level of the federal deficit and debt level. The federal government went through a partial shutdown during 1995 as Congress and the president wrangled over a balanced budget strategy, and the issue is certain to gain attention during the 1996 presidential election season. However, there is much debate over how the deficit is even measured, let alone how to reduce it. Indeed, economists do not even agree that deficit reduction is necessary for economic prosperity, and there are a number of economists who suggest that deficit spending is not a negative factor in the economy. This research explores the issue of government deficit spending and debt levels from a macroeconomic perspective, including what measures might be taken to reduce the deficit.