Budget Deficit

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Budget Deficit

For many decades, there has been a concern for the deficit within the United States. Many politicians, authors, newscasters, and citizens have expressed their distress in order to resolve or control the issue. Keynesian economic theory states that running a budget deficit is okay, as long as the deficit is not exorbitantly large and is not carried for a long period of time. Even though many experts agree with this notion, having a deficit at all is important to the present and future economic stability of a country. For the most part, the uncontrolled increases in spending and reckless tax cuts in the past have damaged the federal budget, which the White House and Congress have allowed to occur. President Bush has
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However, after the economy has recovered, the deficit becomes a problem. In the event that the current deficit is not handled properly, the country will begin to see the weakening of the production of goods and services, in turn forcing wages to decrease. Interest rates will rise, which will make it harder for households and businesses to acquire loans. These factors will increase the strain on the American public and unfortunately lower the ability of the government to intervene, due to the already high deficit. In addition, interest obligations of the federal government are slated to grow from $155 billion in 2004 to $514 billion in 2014, or by $359 billion. These extra costs are the result of both rising interest rates and increased borrowing by the federal government. In order to sustain the economic power and prosperity that the United States has created, major change must be implemented by government leaders, not by career politicians. When a budget is in deficit there are only two ways, other than faster growth in the economy, to bring it into balance. Spending must be cut or revenue increased. Obviously, cutting spending to many of the current governmental programs is difficult because they have already been implemented and deemed necessary. Increasing taxes is also a difficult issue for politicians to handle and for the public to accept. There needs to be a healthy mix of these two options that keeps the economy powerful, while
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