Recall that the National Savings has 2 components, private s…
Recall that the National Savings has 2 components, private savings and public savings. The 2 variables that define public savings is government spending (G) and taxes (T). In this context, when the federal government spends more money than it receives in taxes in a given year, it runs a or . Conversely, when the government receives more money in taxes than it spends in a year, it runs a or . If government spending and taxes are equal, it has a budget. According to the Congressional Budget Office, in 2024, the federal government spent $6.9 trillion, where almost $4.9 trillion was financed by federal revenues. In this context, in 2024 we had a budget . Finally, a country’s ability to pay its debt is measured by ratio. The higher is this ratio, the is the country’s ability to pay its debt.