preview

Entitlement Spending Problem

Decent Essays
The other alternative often discussed is to decrease entitlement spending and other government program. Entitlement spending is money used to fund programs like Social Security, Medicare and Medicaid. In addition, the largest portion of the federal government’s budget is spent on defence spending. The problem is that spending on these programs is growing at a greater rate than the Malaysia economy. This means that the income generated from tax deposits cannot keep pace with the spending on these programs.
Proposals being discussed to limit spending are placing caps on the amounts that can be spent on any government program. This would force programs to make cuts since they cannot exceed the caps. There have also been talks about restricting the growth of every government program to the rate of inflation. That way wages would have a better chance of keeping pace with spending.
…show more content…
So, the deficit just continues to grow. There is no easy solution to the budgetary problems in the Malaysia. Hard choices will need to be made and it will take some outside-the-box thinking to develop solutions. We think it will take a hybrid approach if we want to seriously eradicate the deficit. An advocate for higher taxes but would not be opposed to a modest tax on consumption paired with spending cuts to lower the deficit. It would have to be specifically stated that any money rose from any tax increase or spending cut would have to be used towards eliminating the deficit. Hopefully that will help to lower our deficit and rose back our country image and
Get Access