Free Essay About Historical Perspective Of Entitlement Spending
The National debt can be described as the amount of cash that the federal government owes either private institutions or other governments over the US history. The amount articulated should be equal to the sum of all the incurred deficits throughout the history since 1789 up to date. The shifting in patterns affects the economic burden of the national debt in that; it can run a deficit in the budget where the saving in that period is negative. It can affect future generation where consumption spending is replaced by crowded investment productive or investment that have return rate that is lower. It increases the risk of the debt crisis and when the national debt is owed to foreigners where when repaying in future the cash is taken to foreign countries leaving citizens bearing the burden. Investment is spending on projects that lead to future economic growth. Consumption is where the money is spent on goods and services that bring immediate usage and they are mostly entitlements. National defense and other entitlement qualify to be consumption because they do not contribute to the future economic growth of the country. Education, Research, and development fall under investment because they would eventually contribute to economic growth of the country.
In conclusion, globalization and immigrant influx in the United States has attributed to the shift in spending patterns from 1962 to date. Currently, such entitlements have high demands as compared to the investment in the U.S., and that requires intelligent planning from the government in order to balance the spending between investment and entitlement. There is no state that can exist without debts, and some of the bonds applied by the government cannot be paid within a short periods. They would always be long-term loans, and the country may experience recession while it is struggling to pay the loan that might lead to burden for future generation.