Answer Key for Teachers Fasttrack to America's Past
Section 8:  Modern America
Page 8 - 37 and 8 - 38   The Federal Budget & The Federal Debt
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What the Table Shows

   Introduce the table by explaining to students what a budget is, using a household budget as an example.  Families have income, and must spend money for items needed and desired.  The household may have a surplus at the end of the year, if it has spent less than its income.  If it spends too much, however, there will be a deficit, which must be covered by borrowing money.  The same is true of the federal government's budget.
   Households, like governments, need to hold any borrowing to a reasonable percentage of the household income.  If the family consistently spends more than its income, the debt owed will accumulate year by year.  Of course, debts require the family to pay interest on the loans, and those interest payments can become a severe financial strain if the debt gets out of control.

   Keep in mind that while the budget of the federal government has grown tremendously, there has also been enormous growth in the nation's total economy.  The table shows that as a percent of the total economy, federal spending has actually been pretty stable.  
   The most serious concern is the accumulated federal debt, over 5.6 trillion dollars in 2000.  The interest on that figure must be paid each year by taxpayers, of course, just like a family must pay the interest on household debt.  Politicians regularly promise to solve the debt problem while running for office.  Once elected, however, few are willing to do what would be needed to solve the problem:  make cuts to government programs or raise taxes.

Questions, p. 8 - 38

1.  The federal government's...

   True - no change needed.

2.  Spending by the federal...

   True - no change needed.

3.  In all of the years shown...

   False - change to:  "most of the years"

4.  In 2000 the federal government...

   False - change to "two trillion"

5.  Federal spending has been...

   True - no change needed.

6.  President Ronald Reagan...

   False - change to "increased"

7.  Under President Clinton in...

  True - no change needed.
 

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Questions, continued
 

8.  The size of the federal debt...

   False - change to "rose steadily"

9.  In 1990 the federal debt...

   True - no change needed.

10.  Written out completely...

   False - change to $ 5,629,000,000,000

   

 
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   Teachers whose classes are legitimate users of the Fasttrack to America's Past workbook may print this Answer Key to paper for easy reference while teaching and planning lessons.  All other reproduction is prohibited.  Copyright 2003 by David Burns.