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Use select charts from the Guide to the Markets to engage in portfolio discussions.

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The federal debt

The federal debt problem took decades to create and has been greatly exacerbated by the depth of the recent recession. Although the problem is a big one, there have been steady improvements in recent years.

Economic Expansions and Recessions
The U.S. spends too much and takes in too little
 
  • In 2013, the federal government only recouped a fraction of total spending in the form of taxes and had to borrow the difference to fund spending.
  • However, this is not a new problem as government debt, or accumulated government deficits, remain at all time highs. Long-term debt reduction will require lower spending, higher tax revenues or some combination of the two.
  • While recent lower government spending and higher tax revenues have dragged on economic growth, the majority of fiscal drag from Washington should be behind us. The risks associated with future deficit and debt reduction should be manageable.
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Federal Finances
Cash Accounts