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<p>This project consists of an analysis of the federal budget through the years 1990-2020. The key issues to be addressed are (a) average percentage of deficit as a percentage Gross Domestic Product (GDP), (b) interest rate(s) on debt depending on forms of debt, (c) annual interest cost, (d) debt structure, (e) government outlay percentages relating to GDP, and government receipt percentages related to GDP. The objectives are to identify apparent trends in the U.S. federal governments deficits and implications of annual and total debt. These data are necessary for the analysis of the federal deficit. The federal budget is a complex formulation of many different inputs used to comprise economic standing. The purpose of this analysis is to identify past, present, and future implications of the federal deficit, e.g., net interest cost. The deficit and interest costs are positively correlated. When the deficit rises, so does the amount of interest paid. This is true assuming interest rates remain constant. Lately, as interest rates have fallen, the debt burden is lighter even though the overall debt is larger. Furthermore, higher interest payments lead to less capital devoted towards programs and the overall budget balance. Conversely, a lower deficit leads to lower interest payments. Therefore, capital can be reallocated to other avenues, such as social programs, infrastructure, and education.
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<br>Subjects: Federal Deficit; Net Interest; Public Held Debt; Gross Domestic Product (GDP)</div>
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Jackson, Louis</div>
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