Explore BrainMass

Deficit spending, debt and interest expense

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

1. Suppose the federal government balanced the budget and no longer ran a deficit. Despite this action, interest on the federal debt is still substantial. As a public finance topic, comment on this statement.

2. Analyze and explain on the trend of federal government expenditures and in your opinion, what action(s) if possible should be taken to decrease the level government spending?

© BrainMass Inc. brainmass.com October 25, 2018, 7:21 am ad1c9bdddf

Solution Preview

Step 1:

If the Federal government balanced the budget and no longer ran a deficit the interest on federal debt is still substantial. The interest expense is on outstanding debts and includes certificates of indebtedness, bonds and notes issued in the US and abroad. In addition, there are savings bond, government account series, state and government series, and US Treasure notes and bonds. In several cases the government has to pay premiums on bills, notes and bonds. During the recent years the Federal Government has been incurring the largest deficits since the World War and the federal debt held by the public has increased. It crossed the $9 trillion mark at the close of 2010 this debt was 62 percent of ...

Solution Summary

This posting gives you a step-by-step explanation of Deficit spending . The response also contains the sources used.

See Also This Related BrainMass Solution

Fiscal Policy: Government spending, taxes, budget processes

I need assistance getting started with the following case study reference Budget outlook.

For this Case, please read "The Budget Outlook" section of the CBO's The Budget and Economic Outlook: Fiscal Years 2009 to 2019, dated January 2009, at


The specific information you need for this case is on page 16 in Table 5. However, there is a great deal of interesting information in this document and I encourage you to look through it and see what it contains.

1. What are the three major categories of revenues for the federal government?

2. What are the three major categories of expenditures for the federal government?

I would like to see more detail on revenues and expenditures than what is given in the above referenced table.

3. Explain whether or not we should be concerned with net interest outlays and national debt.

4. What major concerns are there about the federal budget in the long run?

5. How would you recommend those concerns be dealt with?

View Full Posting Details