Re: Discussion Topic 5: Should the government be required to always balance its budget? Why or why not?

by Barbara Harris

No, the government should not be required to always balance the budget

A balanced budget for the Government generally means the difference between government incomes and expenses over an accounting period of one year. The U.S. national debt is close to 14 trillion dollars. Government incomes is generated from taxes, fees, and business revenue. According to last year’s Congressional Budget Office, the federal forecasts revenue will reach approximately $3 trillion and the spending is approximately 3.78 trillion.

Balancing the government’s budget sounds logical, as a matter of fact, that is the task of most Americans. Financial Planners suggest that a family should save 10%, tithes 10% and the other 80% is to purposefully be used for sustaining your life style that you have created. However balancing the government’s budget should not always be required nor should that be the goal because there are too many variable. If the existing condition or the environment is not right it could do more harm to a bad situation than help.

The government can generate more revenue via raising taxes or the government can reduce spending by ending subsidies, scaling back with Medicare and social security to balance its budget. Either option would hurt the poor the most during recession. If the government decreased its spending, that also decreases the poor income and consumer’s consumption indirectly. If the government increased the taxes, that would decrease income.

by Tao Lu – Friday, August 1, 2014, 3:29 PM

I agree with you. As always, you are giving a very high quality answer. It’s good to balance the budget but shouldn’t make it required as “always”. It depends on the situation. Sometimes, a deficit may benefit its economy in a long run. And forcing to balance the budget may slow its economy to grow (e.g. cut spending on social security, or collect more tax).

by Anand Viswanath – Friday, August 1, 2