Summary: Understanding National Debt

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Video One: Understanding National Debt 1. The federal deficit refers to the difference between all the amount the government attains from taxes plus receipts (other revenues) and the outlays (the cash the government spends). On its part, the national debt refers to the overall debt as a result of accrued deficits in addition to the accrued off-budget surpluses. The national government with regards to on-budget deficits can borrow money by offering treasury securities to the public, which then adds to the total debt. 2. A huge government such as that of the U.S. requires huge budgets. However, in relation to its GDP, the U.S. is regarded to have a small public sector, yet the budget for defense is about a sixth of the entire national expenditure.

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