Chapter 16 Budget Deficits, Surpluses, and the National Debt: What Legacy

Chapter 16 Deficits, Surpluses, and Debt: Past, Present, and Future

Activity 16.1 Deficit? Surplus? Debt? What’s Going on Here?

Type: In-class demonstration Topics: budget deficit, budget surplus, national debt Materials: National Debt Clock (http://www.brillig.com/debt_clock/) – optional Time: 5-10 minutes Class limitations: Works in any size class

PURPOSE

How can the U. S. Government have a surplus and a debt? What’s the difference between debt and deficit?

The terms deficit, debt, and surplus can be easily confused. This demonstration will help students make the distinction between the budget deficit (how much the government’s expenditures exceed its receipts in a usual year) and national debt (the federal government’s total indebtedness at a point in time usually due to previous deficits).

INSTRUCTIONS

Have students consider the following questions:

1) How much income do you have in a month (include financial aid, wages, allowance from parents)?

Answers will vary.

2) How much do you have to spend (rent, school expenses, food, clothes, housekeeping expenses, transportation expenses)?

Answers will vary.

3) What happens when your expenses are greater than your income?

The answer here is the student has a budget deficit.

4) What happens when your income is greater than your expenses?

The answer here is that the student has a budget surplus for that month.

5) What happens when the government spends more than it receives as revenues?

The government has a budget deficit. 6) What happens when the government does not cover the deficit?

The government accumulates an outstanding public debt. The current level of the U.S. national debt can be found at the U. S. National Debt Clock at http://www.brillig.com/debt_clock

Activity 16.2 Budget Debate

Type: In-class presentations and debate Topics: budget deficit, budget surplus, national debt Chapter: Chapter 16 – Budget Deficits, Surpluses, and the National Debt: What Legacy? Materials: Timer (stopwatch or kitchen timer) Time: One class Class limitations: Works best in classes with fewer than 50 students

PURPOSE

The budget for the United States government is often a hot topic for discussion. In this activity, the class gets to participate in this discussion with more information than the average citizen.

INSTRUCTIONS AND POINTS FOR DISCUSSION

Before students come to class, ask them to closely read the chapter and review information found at the following Web sites:

Budget Debate – Internet Resources Budget of the U.S. Federal Government – http://w3.access.gpo.gov/usbudget/ Office of Management and Budget National Priorities Project http://www.natprior.org/ Center on Budget and Policy Priorities http://www.cbpp.org/ National Budget Simulation http://www.budgetsim.org/NBS/

Citizens for Budget Reform http://www.budget.org/ Citizens Against Government Waste http://www.cagw.org/ General Accounting Office http://www.gao.gov

At the beginning of the class period, divide the students into three groups: liberals in favor of government programs, conservatives in favor of reducing the size of government, and the decision makers. Once students are divided into groups, ask each group to deliberate about the incentives that motivate members of the group they represent and make a list of these incentives. After five to ten minutes of this deliberation, tell the students in the first two groups to prepare a brief argument (three main points). The decision makers group should use this time to prepare two or three questions for each group. Give them about fifteen to twenty minutes to prepare their presentations. Once they are ready, have a representative from each group make a presentation. The entire group can field the questions from the decision makers. After the presentations and questions are over, the decision makers should make their decision in favor of one group or another. This can be a vote done in secret, but the groups are allowed to ask for a “roll call” vote. (In this scenario, you will need to closely watch the time for presentations and possibly limit the group presentations to 5-8 minutes. If your class is small, then you can just divide the students into two groups and take on the decision maker role yourself.)

Incorporating Other Views If class size warrants, you may also choose to include a group that represents “third party” interests. In this case, students should also review these Web sites:

Third Parties & the Budget – Internet Resources

The Greens/ Green Party USA http://www.greenparty.org/

Libertarianism http://www.libertarian.org/

Reform Party http://www.reformparty.org/

Natural Law Party http://www.natural-law.org/