Specific purposes:

To illustrate the need to stop the United States debt

1) Introduction
I.
Attention getter
You may think you might not have to care about nation debt because it is not
yours and government will take responsibility for that. However, today I will
show you how national debt can affect you such as make you pay more tax and
house loan, which left less dollars in your pocket.
II.
Connection
When government runs into high portion of debt, it has to raise its revenues by
taxing civilians. Interest rate for national debt is also served as a benchmark for
interest rates in everyday market such as student loans.
III.
Thesis
Therefore, raising of national debt can lead to numerous negative consequences
that can not only affect government but also yourselves.
Preview statement
Large portion of national debt can lead to many serious consequence such as increase the
interest rates that Americans have to pay debtors, hamper the economics progress and
impact everyone in the nation.
Transition
The interest rate that the United States has to pay its debtors increase by the amount of
debt. Thus, the amount of money that American has to pay back will exponentially
increase.
2) Body
Main point I
Rising amount of debt can increase the interest rate that American has to pay debtor.
I.
To issue more debt, America have to make it more attractive to debt buyers, so if
you want to have more people buy debt, then currently do at the current interest
rate, you have to raise the interest rate.
II.
Dr. Salim Furth, Senior Policy Macroeconomics Analyst comments that 1%
increase in debt-GDP ratio will change a long term interest rate to 30% or 46%.
A. GDP is the gross national product, which mean how much
value of the
products that each country can produce per year.
III.
According to CNN money, It is projected that debt held by the public will be $11
trillion increase in next ten years.
IV. Considered the risk of a country defaulting on American debt service obligation
increases, the America will loses its social, economic and political power.
Transition
An increase of American debt not only exponentially increase an amount that the
government has to pay back the debtor but also reduce the economic potential of the
United States of America.
Main point II
Ramping debt can hamper economics progress and weaken job market due to the
changing of money management prioritization and the reduction of incentive of people to
work.

I.

Rising Debt can hamper the economic progress

A. According to Manmohan Kumar and Jaejoon Woo Senior Economist at

the IMF (International Monetary Fund), high-debt advanced economies
grew an average 1.3 percentage points slower than low-debt countries
(below 30 percent of GDP)
B. Treasury Department will have to raise the yield on newly issued treasury
securities.
a) Economically stimulating types of spending such as building
infrastructure will turn to be second priority
b) Smaller portion of it will go toward other more economically
stimulating types of spending, such as providing tax incentives for
small businesses or building infrastructure.
II.
Increasing debt can weakens job market
A. Government has to collect more tax in order to pay increasing interest.
B. J.D. Foster, senior fiscal policy economist, comments that people incentive
to work will be decrease because they will get smaller portion of money
left after tax.
Transition
National debt can not only hamper economics system as a whole by slowing its progress
and weakening job market, but also affect every American individually.
Main point III
Raising of national debt can have detrimental impact on everyone in nation.
I.
Interest rate for everyone in the United States such as consumer loan products,
including student loans, car loans, credit cards, and mortgages will go up
A. The US Federal bank sets a base interest rate, upon which most other
interests rates are based. The primary means to increase or shrink the
money supply is for the FED to change that interest rate.
B. It is hard for federal government to step in and hold rates down.
C. According to Georgetown finance professor Reena Aggarwal, "The market
is not stupid. The market sees that eventually interest rates have to go up."
II.

National debt can lead to crowding out effect.

A. Crowding out effect is the phenomena when public sector spending
replaces, or drives down, private sector spending.
B. The government borrows such large amounts of capital, its activities can
increase interest rates.
C. According to Olivier J. Blanchard, economics professor from
Massachusetts Institute of Technology, higher interest rates discourage
individuals and businesses from borrowing money, which reduces their
spending and investment activities.

3) Conclusion

An increasing of national debt can lead to a great number of hazardous consequence.

First, Rising amount of debt can increase the interest rate that American has to pay debtor
due to the fact that America has to provide more incentive for debt buyer. Moreover, an
increasing of national debt can hamper economics progress and weaken job market
because it reduce people incentive to work and government can spend less money on
economics stimulating project such as building road. Lastly, Increasing of national debt
will not only affect government who has to pay back the debt but also affect every
American
Transition
Clearly national debt is the problem that is needed to be fixed. Now it is time for Hailey
to elucidate how we can handle with the United States national debt problem.

Citation
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