In case an economy goes to the recession, the government has to stop the downward spiral and assist in turning the economy back (Schick, 2008). Hence, budget deficit may assist in stabilizing the economy. The economy tends to improve due to budget deficit while business improves resulting in increased investment. Budget deficit assists the purchase of infrastructure and spreading of bills.
4. Will you increase taxes to help collect more money? If so, what will be your plan for your tax increase?
Taxes may be increased to assist in collecting money. Increase in taxes will be a guarantee for absolute revenue collection. This will be achieved via targeting levels of income and focusing on average levels and average taxes relief for the average taxpayer. Taxes for millions of middle-class families will be raised. Such plan would inappropriately benefit the higher income earners and corporate (Rubin, 2016).
5. Will you decrease taxes? Regardless, what are possible advantages to decreasing taxes even when spending is high?
Private sectors will be more efficient when it comes to spending resource than the case of the public sector. Decreased taxes may increase the incentives. Decreased taxes will be a way of encouraging people to work for long hours while new people will enter the labor force. Cutting taxes is argued to have the capacity of increasing government revenue.
6. In what areas will you allocate money to stimulate the economy? Explain.
Allocation of money tends to be risky, politically stimulated, and less productive and leads to higher prices. Currently, anywhere where money tends to be allocated has experienced higher inflation rates. Free and voluntary trade is the best method for allocation of money. People need to be allowed purchase what they wish (Schick, 2008).
Create a Budget.
Budget Category Percentage of Total Budget:
General Government - 22%
Higher Education - 25%
Safety/Corrections/Courts - 10 %
Health, Welfare, and Families - 15%
Public Education - 10%
Total Spending: =100%
1. What criteria did you use to decide which areas received the most or least amount of the budget?
Allocation of the state budget and development resources needs to cover ways areas for poverty reduction and in line with the Public Investment law. The law ensures that there is the effectiveness of centralized management, the creation of decentralized investment management and mechanism and policies (Rubin, 2016).
2. What are some reasons why your budget category should receive the highest percentage of spending possible?
The allocation of the state budget and development of capital for the national program has taken the focus of low socio-economic conditions with a higher allocation to lower the gap for development, equalize income and living standard for citizens in various country regions.
3. As you think about your budget, do you have any ideas for spending cuts? What strategies would you use to advance your ideas for cuts?
Across the board cuts assists in reducing budget spending, functions, and programs with the flat rate reduction.
Programmatic cuts assist in reducing functions and programs with an efficient and relative significance (Hyde, 2002).
Lowering administrative costs assists in reducing the overheads
Workforce reductions which may assist in significant cost saving via forced layoffs and attrition.
Centralization or consolidation of function which may result in greater efficiency (Rubin, 2016)
Hyde, A. C. (2002). Government budgeting: theory, process, and politics. Wadsworth Publishing Company.
Rubin, I. S. (2016). The politics of public budgeting: Getting and spending, borrowing and balancing. CQ Press.
Schick, A. (2008). The federal budget: Politics, policy, process. Brookings Institution Press.
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