What is a Government budget/debt?
The government budget is a financial statement that demonstrates the government’s suggested revenues and spending for the financial year. Budget surpluses occur when income exceeds expenditures. Budget deficits occur when spending exceeds income. The national debt excludes the current account.
The government budget includes money spent on military services. Military spending in the US amounted to 714 billion U.S. dollars in 2020. This is likely due to having one of the largest armies in the world (airforces, navy and Marine Corps). Especially since the US had affairs within Syria, Iraq and Afghanistan (up until recent 2020 and 2021 changes) it was a heavy burden having to constantly supply the army with whatever resources needed.
"The amount of funding that goes towards the Department of Defense is heavily criticized by Democrats in the United States, because they believe that the funding should be more evenly distributed towards other social welfare programs such as public health insurance and education." - Erin Duffin, Statista
United States debt for last 5 years (2015-2020):
https://www.statista.com/statistics/269963/budget-balance-of-the-united-states/
https://www.statista.com/statistics/187867/public-debt-of-the-united-states-since-1990/
Recently in 2020 and 2021, the national debt of the US has risen drastically, from around 22 000 billion to almost 27 billion. This is likely due to the CARES act being implemented as a response to COVID's impact as well as the further anticipated impact it may have on the economy. This fiscal policy helped provide subsidies for healthcare industries to purchase equipment and medicinal supplies. Businesses were able purchase machinery and invest. Individuals recevied varying subsidies based on their situation such as unemployment benefits, subsidies towards married individuals etc. A combination of government spending, investment and consumption may help boost aggregate demand (AD) to avoid an extreme recession.
Another reason that debt may be higher is due to tax cuts and subsidy benefits. This fiscal policy helps incentivize firms and individuals to spend or invest due to having a higher disposable income. These include deductions income tax and corporation tax among others such as social security tax. More spending in theory should also lead to a higher AD as well.
Having a high debt is not necessarily bad. While it may force governments to have to borrow more often, the money is likely being used to help fuel AD through government spending in order to reduce unemployment and increase economic growth.
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