Great Recession and Deficit Spending

Overspending is a pertinent problem facing the lawmakers in Congress. In 2012 discretionary spending reached $1.3 trillion and mandatory spending $2 trillion, while only bringing in $2.5 trillion in revenue. Since the turn of the century back in 2000, non-mandatory spending by the government has topped out a whopping $16.1 trillion just in the past 13 years (Boccia, Frasser & Goff 2013). This persistent overspending on programs and services that are not necessary to the functionality of the country is what is causing the deficit to rise year after year. To remedy this issue the government must either increase the revenue it brings in through taxes and trade or reduce the amount of money it spend or perhaps even both. In 2012 thirty-one cents of every dollar that Washington spent was borrowed (Boccia, Frasser & Goff 2013). Most of which went to large programs such as Social Security and Medicare and if these large, growing programs, or just the budget in general, do not undergo financial reform it could spell disaster for the economy and fiscal state of the nation.

This creates a budget deficit because there is more being spent than what’s being brought it.

Public expenditure - Spending made by the government of a country on collective needs and wants such as pension, provision, infrastructure, etc.

A fiscal deficit is when a government's total expenditures exceed the tax revenues that it generates. A budget deficit can be cut by either reducing public expenditure or raising taxes. In this essay, I am going to analyse the benefits and costs of increasing tax rates to reduce fiscal deficits instead of cutting government expenditure.

Recession is a term that looms over any society at some point or another but what does recession mean for the economy, in short it is an economic decline. This essay will examine the meaning of recession and will discuss the fiscal and monetary policies that are used to pull economies out of recessions. The great Recession of 2008 will shed light on how these policies were successful at restoring economic growth and reducing unemployment.

He begins with the question, “ARE you confused about whether large federal budget deficits matter?” Robert H. Frank uses his article to clarify to the audience that deficits can actually be utilized to help the economy if used in the right ways. It’s obviously expensive to run such a superpower like the United States of America and as a result, deficits and debts are encountered. In simple terms, a federal deficit is when the government is spending more or outlays more than it is taking in revenue and national debt is the result of the federal government borrowing money to cover all of the years of budget deficits. People, such as Harvard economist, Martin Feldstein, have argued that failure to run large deficits could prolong economic downturn; however, most who have studied the issue possess a general consensus that “short-run deficits help end recessions, and that whether long-run deficits matter depends entirely on how the government spends the borrowed money.”

When a government’s spending exceeds its revenues causing or deepening a deficit it is called deficit spending. Deficit spending is only one of numerous tools used to help manage the economy. Deficit spending is presumed to stimulate consumer demand by helping the consumer to obtain more money to spend, in turn, the demand of product will rise. There are advantages and disadvantages to deficit spending that we will discuss further below.

Any person struggling through difficult times will seek out other means of financial support including borrowing money that may be harder to pay back in the future. The United States will often follow a similar path and spend more money than it earns. Deficit spending in the United States comes with some advantages, disadvantages, and strong criticism. Some feel deficit spending is good for getting the economy back in motion while others contend it does nothing for the economy. The effects of deficit spending are carefully examined to determine if the United States is improving or degrading the future of the economy.

There are a number of both long and short term effects that a large budget deficit/debt can have on an economy. First, there will be increased borrowing, meaning the government will need to borrow from the private sector (Pettinger, 2014). Second, there will be higher debt interests payments, meaning selling bonds will increase the national debt, leaving future generations to have to pay higher taxes (Pettinger, 2014). Third, an increase in aggregate demand will occur, which could potentially cause a higher Real GDP and inflation to

Deficit spending is defined as excess spending of income or assets in a given period. (dictionary.reference.com, 2014) In other words, it means that the government continues to increase spending when we already owe more than a trillion dollars. Throughout this paper I will be evaluating the ethics of this topic using with my own personal opinion along with Haidt’s six ethical principles. (moralfoundations.org, 2014) I will also explore the strengths and weaknesses of my argument using articles from the Washington Post and CBS news that support reduced government deficit spending.

Creating economic growth is the key; one of the biggest advantages for deficit spending is the anticipated growth. New programs and investments get set in place to help train for higher income jobs, investments are made to create new jobs and a greater work force. Makes firms and companies

Since the early 1950's Americans have had trouble controlling overspending. The United States government has engaged in deficit spending. This occurs when spending exceeds the amount of income

deficit. This means as long as the government spends the money it gains from a

Answer: If there is a difference in the spending of government and the in income will lead to the deficits. More over deficits occurs when the amount of government total budget exceeds its total receipt for a fiscal year was said by US senate budget committee. From the US debit clock, largest budget items list are medical, social security, defense/war, income security, net interest on debt, federal pensions. As we can see that the largest budget items every item has its own importance for Medicare the budget is $949 billions, social security is $872 billions, defense is $591 billion, income security is $310 billions, net interest on debt is $245 billion, and federal pensions is $253 billion. A cut back in the spending of the government is not an easy task because which lead to so many issues. Every items has got his own importance consider defense which is a national importance, medical which is health importance, likewise every items has got their own importance. I would recommend cut back on income security in which the budget is allotted to maintain forester care, earned income credit, unemployment compensation, nutrition assistance, family support, making work pay this is meant for the citizens of the social welfare.

This paper will attempt to answer the question: Is the federal deficit and government deficits in general a good or a bad thing? While it may be easy to lose sight of how the government chooses to handle its money, it is also important for citizens to be conscious of how their money is being spent, and whether or not the current course that the government is plotted on is either sustainable or the best allocation of resources.