Effects of the United States' Deficit, Surplus, and Debt
The United States goes through a large amount of changes every day and there are certain things that affect all Americans. When the United States goes through deficit at times, surplus, and debit and when these things happen everything is affected. Students, business owners, and even car manufacturers are affected. These three types of budget issues happen to the United States and when one happens they have positive effects and the negative effects. Each person and business that is affected by this has to make sure that they know how to adjust to the changes so that they can better their finances.
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University of Phoenix Students
The United States deficit has a severe impact on the national economy. The deficit is attributed to mounting debts, reduced income, and revenues. The high unemployment rate is affecting college students and graduates who have mounting student loans. These college students are experiencing difficulties to repay their student loans. Outstanding student loans were estimated at $1 trillion by December 2011 (Madison, 2011, p. 1). Students are increasing their risks of student loan default as a result of to high credit card debts, unemployment, and other factors created by the slowing economy. The burden of debt and potential delinquency predicament is alarming and may have adverse effects on the struggling economy. According to Madison (2011), University of Phoenix offers programs for nontraditional students including online degrees; however, many of its students face high percentage of loan default. There is a growing concern that students attending for-profit colleges will need additional government assistance to meet their educational debt obligations. A government budget surplus would provide additional funds to help address the increasing student loan crisis and expand more educational programs.
The current American budget deficit is a deterrent for employment and economic growth. According to the Bureau of Labor Statistics (2012), the unemployment rate was at 8.3% as of January 2012. Government spending is on the rise and tax reductions are necessary to prevent further depressive economic conditions. A budget surplus can be a positive factor for unemployed individuals if the extra funds are used toward job creation and training. The polls indicate that the public is alarmed by the deficit, but its main concern is about jobs, and economic recovery (Howard & Vallely, 2010, p. 1). The government’s decision to extend unemployment benefits is crucial to many who face the prospect of lengthy unemployment periods. The Congressional Budget Office estimates that a $1.90 economic growth may result for every $1 of unemployment benefits (Howard & Vallely, 2010, p. 1). A government surplus would be beneficial to address the current burden on the American economy. If the government uses the extra funds from the surplus to create jobs, the unemployment rate would decrease significantly. The current uncertainty about economic recovery and job prospects has many unemployed Americans worry and frustrated.
The United States Financial Reputation on an International Level
When the government spends more money than it takes in jobs are affected. High deficit affects import, export, investments, and growth. The deficit is the largest in history at $700 billion and needs reduction. This could be done through an international role of the dollar reduction. The United States try to maintain a deficit of 3% of Gross Domestic Product (GDP) and concentrate on long-term fiscal stability.
Surplus happens when...