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Federal Budget Deficit Analysis

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Federal Budget Deficit Projected to Soar to Over $1 Trillion in 2020 The annual budget for the Federal Government is predicted to increase over the next few years. In fact, it's supposed to surpass $1 trillion dollars in 2020, even though the economy is growing at a healthy rate, the Congressional Budget Office says. The national debt has gone beyond $21 million and even goes from there to past $33 trillion in 2028. By then, the public’s debt will almost match the size of the economy. It’ll be at 96% which is higher than post World War to and past the crisis point. Some economists think that increasing deficits will bring interest rates up, expand private sector’s borrowing costs, and prices of tank stock. All this will decrease the growth …show more content…

The budget office predicts the economy’s growth rate over the next decade to be at 1.9%. Growth would begin intensely at 3.3% now and 2.4% the following year, then go stagnant. If individual’s temporary tax cuts are planned to go past when their due at the end of 2025, the price for the tax would be greater. Our president, Mr. Trump has discussed the “Phase 2” tax cuts which entail making tax cuts for individuals permanent. The democrats don’t agree with this. They say the republicans have always planned to increase deficit so they can make room for big tax breaks for wealthy Americans and large corporations. They’ll use that deficit to defend cuts in social security and medicare. A representative, Nancy Pelosi who’s a House Democratic leader says the C.B.O’s report portrays the ups and downs of costs of the tax scam from the G.O.P and the republicans try for fiscal responsibility. The fiscal year terminates on the 30th of September and the budget deficit is planned to be $804 billion, an increase of $604, as projections predict. The red ink is planned to increase by $1.5 million. All these predictions are more unfavorable than the projections from the budget office last year in June prior to congress agreeing on the tax cuts and approving …show more content…

A deficit in economics is when there is a surplus over expenditures in a certain time period. Here in the article, the government spent more than what the budget allowed. The government controls government spending and doesn’t affect investments and consumption. Social insurance programs are talked about in the article. These are programs from the government (transfer payments) meant to protect families for economic hardships. Examples of these transfer payments mentioned in the article are medicare and social security. This relates to fiscal policy and government transfers because it is a government transfer. Fiscal policy is also the use of taxes, government transfers or purchases made by the government that shift the aggregate demand curve. Expansionary fiscal policy increases aggregate demand and the factors that contribute are a tax cut, increase in government transfers and an increase in purchases in goods and services by the government. We see those factors throughout the article as it talks about growing deficits because of the Social Security and Medicare. Expansionary policy is incorporated into the article when the budget office discusses the prediction of high interest rates so Americans will purchase more

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