2011 U.S. Debt Ceiling Crisis

• The 25% rule is a heuristic that can refer to either public finance law or intellectual property law.

• Salvation is the injection of money into a business or organization that would otherwise face inevitable collapse.

• A balanced budget occurs when revenues equal or exceed total expenditures.

A budget surplus is when revenues exceed spending.#

• B2G, or business to government, is the provision of goods and services to government agencies at the federal, state, and local levels.

• The crowding-out effect suggests that an increase in public sector spending leads to a decrease in private sector spending.

• A spending deficit occurs when government spending exceeds its revenues.

• Purpose is the process by which people or organizations allocate certain money for certain purposes.

• Economic efficiency is when every scarce resource in the economy is used and distributed between producers and consumers in such a way as to provide the greatest economic return and benefit to consumers.

• Economic integration or regional integration is an agreement between countries to reduce or eliminate trade barriers and harmonize fiscal policies.

• Medium-term euronote (EMTN) is a medium-term flexible debt security that is issued and traded outside the United States.

• The Fed’s balance sheet is a list of assets and liabilities of the Federal Reserve.

• The government creates a budget deficit by spending more money than it receives from taxes and other revenues, with the exception of debt.

• The “golden rule” of public spending is fiscal policy, which says that the government should increase borrowing only in order to invest in projects that will pay off in the future.

• Government purchases include any spending by federal, state, and local agencies, excluding debt and transfer payments such as Social Security.

• Gross national income (GNI) is an alternative to gross domestic product (GDP) as a measure of wealth. It calculates income, not output.

• A member of the World Bank Group, the International Finance Corporation (IFC) provides financing for investment by private enterprises in developing countries.

• The J-curve depicts a trend that begins with a sharp decline followed by a sharp rise.

• Property owners are given fair compensation for the lawful seizure of personal property or land.

• Odious debt is a term applied to the debt of a predecessor government that the successor government wishes to relinquish on ostensibly moral grounds.

• Open market operations are one of three tools used by the Fed to influence the availability of money and credit.

• Overlapping debt is when the debt issued to finance the activities of the government falls on several political jurisdictions, while the joint debt is distributed among them.

• Funding for a local project can be included in a larger budget as a separate item. It’s the pork barrel policy.

• Public-private partnership allows large-scale public projects such as roads, bridges or hospitals to be carried out with private funding.

• Pumping refers to steps taken to stimulate spending in an economy during or after a recession.