On Jan. 8, 1835, the United States’ National Debt hit $0 for the first and only time in history!
Watch this video on raising the debt ceiling, made during the financial crisis of 2008, to get a sense of some of the still-current issues on debt, taxes, and deficits:
Government debt, of course, is different from personal debt. Government debt is mostly money owed by Americans to themselves, but it does have consequences.
In times of recession, it can be used to try to generate demand, according to some economists. It is also used in times of emergency, such as during wars, to fund unusual expenditures and to reallocate consumption and production behavior. But not all government debt is benign. Some government debt exists simply because politicians find it easier to finance spending with debt than with new taxes.
- Do you think it is fair that the banker and father in the video push the problem of deficit spending onto the child?
- Do you feel responsible to pay for expenses your parents and grandparents incurred or are incurring?
- What incentives do you think politicians have to continue increasing the government debt? What incentives do they have to reduce the deficit or even eliminate debt? How do these two sets of incentives compare?
Ignacio Martinez. 2018, January 9, National Debt [Digital Image]. Retrieved from <gofundme.com>.