Preview

The Pros And Cons Of Deficit Spending

Satisfactory Essays
Open Document
Open Document
79 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
The Pros And Cons Of Deficit Spending
Widely used in the disciplines of economics, finance, and the government, the meaning of deficit spending varies according to the context. That said, the underlying principle remains the same, i.e., less income, more spending. The subject has also been a topic of world-wide debate amongst economists. While liberals maintain the opinion that this concept increases economic growth, conservatives argue otherwise. The theory is outlined in the following paragraphs, along with its positives and negatives.
Read more at Buzzle:
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Good Essays

    Problem Set 2 Econ 214
    • 495 Words
    • 2 Pages

    Problem Set 2 Econ 214

    The budget deficit is the excess of expenditure incurred by an economy over the incomes generated by it (Gwartney, Stroup, Sobel, Macpherson p.221). In order to ensure that the budget deficit is financed, the government has to ensure it has extra funds available with it. The government, also works out the methods in which, it asks for loans to other countries around the world. By borrowing from other countries and loaning out money to other countries, this now becomes part of our national debt and surplus (Gwartney, Stroup, Sobel, Macpherson p.221). However, Budget deficits do increase aggregated demand as the government has increased in the supply of money to a certain…

    • 495 Words
    • 2 Pages
    Good Essays
    Read More
  • Powerful Essays

    The Value Added Tax and Targeted Budget Cuts as a Means to Reduce the Federal Deficit
    • 2151 Words
    • 9 Pages

    The Value Added Tax and Targeted Budget Cuts as a Means to Reduce the Federal Deficit

    Deficit spending is a government action in which the amount of its expenditures exceeds that of its revenues. In other words, the government spends more money than it receives from its citizens through taxation. While such spending is generally considered necessary in turbulent economic times, recent annual trillion dollar deficits are alarming to say the least. To be sure, continued deficit spending threatens the very fiscal solvency of this country. Though it is reasonable to assume that both Democrats and Republicans agree as to its danger, there has been little agreement between them on how to implement a plan to reduce the deficit. Democrats by and large agree that a deficit reduction plan needs to include increased revenues, i.e. taxes. Republicans insist that the size of government should decrease, i.e. cut taxes. Despite the political volatility these two opposing ideas create, I believe that there is a way in which to do both. The question of deficit reduction then is: What is the most effective way in which to raise revenues and cut taxes?…

    • 2151 Words
    • 9 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Ecos2002 – Intermediate Macroeconomics
    • 554 Words
    • 3 Pages

    Ecos2002 – Intermediate Macroeconomics

    4. In an economic recession why is it that an increase in government spending is usually considered more effective than a reduction in taxes in providing fiscal stimulus to the economy? What does the balanced budget multiplier imply for the conduct of fiscal policy?…

    • 554 Words
    • 3 Pages
    Powerful Essays
    Read More
  • Satisfactory Essays

    problem set 2
    • 250 Words
    • 1 Page

    problem set 2

    3. What is a budget deficit? A situation in which total government spending exceeds total government revenue during a specific time period, usually one year. How are budget deficits financed? Selling of bonds, borrowing from abroad, raising taxes, and selling of assets. Why do Keynesians believe that budget deficits will increase aggregate demand? Because they believe that both fiscal and monetary policies affect aggregate demand.…

    • 250 Words
    • 1 Page
    Satisfactory Essays
    Read More
  • Powerful Essays

    The Pros And Cons Of Fiscal Policy
    • 1588 Words
    • 7 Pages

    The Pros And Cons Of Fiscal Policy

    It can create budget deficit: A budget deficit is when the government spends more money than they annually take in. (Hayes, n.d.).…

    • 1588 Words
    • 7 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    The Pros And Cons Of The Bush Tax Cut
    • 3155 Words
    • 13 Pages

    The Pros And Cons Of The Bush Tax Cut

    in 2001 and 2003. They brought down federal income tax rates for everyone, decreased the…

    • 3155 Words
    • 13 Pages
    Powerful Essays
    Read More
  • Good Essays

    The Pros And Cons Of Federal Deficit Spending
    • 1070 Words
    • 5 Pages

    The Pros And Cons Of Federal Deficit Spending

    (Cooper & John, 2014) The short-term advantage is prevention of disproportional tax increases likely to upset taxpayers, causing loss of support for a war. Deficit spending is best used as a short-term method to cover spending gaps. Using it for long term spending or significant amounts can result in adverse effect to the…

    • 1070 Words
    • 5 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Federal Budget Pros And Cons
    • 391 Words
    • 2 Pages

    Federal Budget Pros And Cons

    The Federal Budget is used for many different necessities in America. It`s used for medicare, social security and more. One portion of our federal budget goes towards our military. Americans should spend less tax money on foreign armies, and more towards defense against terrorism.…

    • 391 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    The Obama Administration's Fiscal Policy for the National Deficit
    • 781 Words
    • 4 Pages

    The Obama Administration's Fiscal Policy for the National Deficit

    The federal budget is an important part of the economy in any country; and, as the Deficit in the United States grows, it is more important to maximum employment, production, and purchasing power. The current deficit as a percentage of GDP is near 11% which is the highest since the 1940s during WWII. The government debt is will rise even higher with the recent health care bill which brings unrealistic spending and tax increases. America’s economy is drawing near to fiscal train wreck. One article by Holtz-Eakin states that, within the next 30 years, the 20% of GDP dedicated to federal expenditure could increase to 30 or 40% of GDP. The conditions do not seem to have any improvement in the near future, and the federal deficit will only increase with the recent government’s health care bill. The results of a widening deficit are increased demands from foreign investors and the reduction of the value of the U.S. dollar. The consistent increase in the deficit could greatly drive up interest rates and eventually cause lenders to lose trust in the United States. As the world loses faith in the strength of the dollar, government bankruptcy, economic chaos, and the collapse of the west as an economic power could be at hand. However, in reaction to these bleak times, the Obama administration created the bipartisan National Commission on Fiscal Responsibility and Reform to attend to our nation 's fiscal challenges. The Commission was created to compose policies to improve the fiscal situation in the immediate tenure and to reach fiscal sustainability over the long run. One main goal of the commission is to cap revenue at 21% of GDP and get spending below 22% and eventually to 21%. Various other goals of the Commission include: Reduce the deficit to 2.3% of GDP by 2015, achieve nearly $4 trillion in deficit reduction through 2020, and stabilize debt by 2014 and reduce debt to 60% of GDP by 2023 and 40% by 2035. The Commission will propose recommendations designed…

    • 781 Words
    • 4 Pages
    Good Essays
    Read More
  • Better Essays

    Pros And Cons Of Military Spending During Iraq And Afghanistan War
    • 1133 Words
    • 5 Pages

    Pros And Cons Of Military Spending During Iraq And Afghanistan War

    People are under the impression that wars are beneficial to an economy. They seem to create jobs and give a variety of businesses work. But do they really turn a profit or is there more spending being done than profit being turned in. The Iraq and Afghanistan war has been very controversial. Part of that controversy comes from the economic perspective of the war. One of the many sub-topics to the war is job creation or job loss. For every one million dollars spent towards the war since 2001-2011, has created 8.3 jobs. On the other hand, with one million dollars spent else where, it could have created many more jobs. 15.5 jobs could have been created…

    • 1133 Words
    • 5 Pages
    Better Essays
    Read More
  • Powerful Essays

    National Debt Cons
    • 1527 Words
    • 7 Pages

    National Debt Cons

    If money is taken out of each pay check for taxes, then how is the United States national debt so high? From day to day, hour to hour, the United States national debt increases. Though the government tries to stop the growth of the national debt, nothing seems to work. Weather its borrowing money from other countries or spending money the U.S doesn’t have; it causes a jump in the debt. So how has the national debt grown and how has it impacted the United States of America?…

    • 1527 Words
    • 7 Pages
    Powerful Essays
    Read More
  • Satisfactory Essays

    The Pros And Cons Of Defense Budgeting
    • 157 Words
    • 1 Page

    The Pros And Cons Of Defense Budgeting

    Taxes are a huge part of life. With these resources we can understand the fact that there are pros and cons to the distribution and consumption of taxes. You can read about how taxes are distributed, who makes that decision, the process of the budget request, and the use of sequestration in Chris Burnett’s article. In Marcia Clemmitt’s article you can learn how public budget generates, how government and public spending differs, and the argument she expresses that defense budgeting is set too high. In Henry’s article you can get an understanding on the global and scheduler models, the protection to eliminate cutting one tax over another, and off-shore documents.…

    • 157 Words
    • 1 Page
    Satisfactory Essays
    Read More
  • Good Essays

    Bush Tax Cuts
    • 1119 Words
    • 4 Pages

    Bush Tax Cuts

    a deficit in order to stimulate spending is good thing; leaving the deficit to be…

    • 1119 Words
    • 4 Pages
    Good Essays
    Read More
  • Powerful Essays

    Federal Budget Deficit Economics
    • 2350 Words
    • 10 Pages

    Federal Budget Deficit Economics

    Of the three, the last one may be the most susceptible to the influence of policymakers. The larger the capital stock, the more productive the labor force tends to be.…

    • 2350 Words
    • 10 Pages
    Powerful Essays
    Read More
  • Good Essays

    The Pros And Cons Of National Debt
    • 638 Words
    • 3 Pages

    The Pros And Cons Of National Debt

    “Debt is the fatal disease of republics, the first thing and the mightiest to undermine governments and corrupt the people” Wendell Phillips, civil rights activist and lawyer (Phillips).…

    • 638 Words
    • 3 Pages
    Good Essays
    Read More