Understanding National Debt and Government Borrowing

The video explains the concept of national debt, which is the total amount of money the government has borrowed and still owes. It covers the two main types of government borrowing: budget deficits and off-budget debt. Budget deficits occur when the government borrows money to cover expenditures that exceed revenue, while off-budget debt arises from supplemental appropriations not included in the regular budget. The video uses the Bush administration as a case study, highlighting how wars in Iraq and Afghanistan contributed to the national debt through off-budget spending. It also discusses surpluses, deficit reduction, and the historical growth of the national debt since World War II.

What is the national debt?

• The total amount of money the government has spent

• The total amount of money the government has collected in taxes

• The total amount of money the government has borrowed and still owes

• The total amount of money the government has saved

What are the two main categories of government borrowing?

• Budget deficits and off-budget debt

• Budget surpluses and off-budget savings

• Tax revenue and government savings

• Government bonds and public loans

How does off-budget borrowing occur?

• Through public donations

• Through supplemental appropriations

• Through regular budget processes

• Through tax increases

During the George W. Bush administration, how were the wars in Iraq and Afghanistan funded?

• Through tax increases

• Through public donations

• Through off-budget appropriations

• Through regular budget processes

What happens when government revenue exceeds expenditures?

• The national debt increases

• A budget surplus occurs

• A budget deficit occurs

• The government borrows more money

How were the surpluses from 1998 to 2001 used during the Bush administration?

• As justification for tax cuts

• To fund new government programs

• To increase government savings

• To reduce the national debt

What does deficit reduction mean for the national debt?

• The national debt increases rapidly

• The national debt remains the same

• The national debt increases more slowly

• The national debt decreases

What would happen to the national debt if there were balanced budgets and no unfunded off-budget spending?

• The national debt would increase

• The national debt would decrease

• The national debt would neither increase nor decrease

• The national debt would double

What was the national debt just after World War II?

• $11 trillion

• $260 billion

• $2 trillion

• $4216 billion

By 2009, what was the approximate national debt?

• $4216 billion

• $11 trillion

• $2 trillion

• $260 billion