Questions and Answers on US Economy and Fiscal Budget

The Department of Defense (DOD) reports that the United States spent about $168 billion (worth around

Overspending is a pertinent problem facing the lawmakers in Congress. In 2012 discretionary spending reached $1.3 trillion and mandatory spending $2 trillion, while only bringing in $2.5 trillion in revenue. Since the turn of the century back in 2000, non-mandatory spending by the government has topped out a whopping $16.1 trillion just in the past 13 years (Boccia, Frasser & Goff 2013). This persistent overspending on programs and services that are not necessary to the functionality of the country is what is causing the deficit to rise year after year. To remedy this issue the government must either increase the revenue it brings in through taxes and trade or reduce the amount of money it spend or perhaps even both. In 2012 thirty-one cents of every dollar that Washington spent was borrowed (Boccia, Frasser & Goff 2013). Most of which went to large programs such as Social Security and Medicare and if these large, growing programs, or just the budget in general, do not undergo financial reform it could spell disaster for the economy and fiscal state of the nation.

Budgeting is perhaps the most essential process involved in the United States government. While this process seems to exist only in the background, it is, in reality, what allows all other processes of government to function as they do. In order to satisfy the most necessities of modern society, changes must be made to each of the three major categories of the budget: the big five, the middle five, and the little guys.

The main difference between the federal budget and the state and local budgets is the issue of a monetary deficit, in which expenditures in the budget exceeds revenues that were estimated. State and local governments are required to balance their budgets. The federal government is allowed to borrow money to meet its obligations and have a deficit. The federal government collects the most tax revenue, but state and local governments have a greater range of revenue options for funding their budgets. The federal government relies mainly on income taxes, capital gains and Social Security taxes. State and local governments collect sales taxes, taxes on fuel, property taxes and fees from special licenses and permits. Also, many state and local

The amount of money that the United States government owes as of October 17, 2004 at 03:48:52 pm GMT was $7,435,016,998.21. The debt has increased by an average of $1.7 billion per day since September 30, 2003! From a more individual perspective, currently the United States population is roughly around

The federal budget deficit is a much discussed and little understood subject in American politics. The current recession has dramatically decreased tax revenues, driving the United States federal government to increase spending in an attempt to stabilize the economy. As a result the current federal deficit is at over $1.3 trillion dollars. This is approximately $47,754 per U.S. citizen or $137,552 per U. S. taxpayer (U.S. Debt Clock: Real Time, 2012).

“To budget is to fight over money and the things money buys” (Document A). The federal budget is adjusted every year and has to follow certain criteria set forward by the Preamble to the Constitution. The Preamble sets five goals that the budget must fulfill, these goals are: to establish justice, to insure domestic tranquility, to provide for the common defence, to promote the general welfare, and to secure the Blessings of Liberty to ourselves and our prosperity. Furthermore, it is difficult to decide what clusters of the federal budget to allocate money to in order to meet the five goals of the Preamble which are “The Big Five”, “The Middle Five”, and “The Little Guys.” In each of the three budget clusters,

There are some differences and similarity between the State and Federal budget. The Federal budget is bigger than the State budget. The federal government have the sovereign bank. The Federal government have the ability to print additional money when the need arises. The federal budget needs not balance revenues and expenditures for each fiscal year. At the subnational level, appropriations must not exceed revenues in the State budget. This creates restriction which is mandated for almost all the state and local finances. “This imposes a discipline at state and local government which the federal government may chronically evade. States cope by setting aside reserves in good years to hopefully cover deficits in bad revenue years” (n.d., 2012).

The three biggest sources of government spending are Health, Social Security, and Defense (The Concord Coalition 2015).

Maria comes home one day earlier than usual. Her family, two daughters of age five and eight and a stay-at-home husband, is surprised to see her so early and unexpectedly. The tired look on her face reveals the experience she had at work. She brings out a sluggish smile as her daughters rush up to greet her with their warm embraces, reminding her of the happiness they constantly provide but also saddened by their questionable future. Quietly, she sits down in front of her anxious spouse as he patiently awaits the news, sensing the tension in the air.

Although the budgets and each level of government are similar, they each have their differences in how they are adopted. The biggest difference between federal and state budgets is the fact that the federal budget can have a deficit in order to meet obligations, whereas state governments are required to have a balanced budget. If there were limitations put on the federal government then the U.S. government would not be able to provide for national emergencies. The federal government has the ability to print money in times of constricted fiscal situations, whereas state governments cannot. The federal government’s budget provides for a large amount of military spending to fund the salaries of military personnel, buy new equipment for the military, and provide funding for military installations both within and outside of the United States. State governments’ are limited to what they provide in their defense budgets to only providing funds for the National Guard of the state. Another difference between federal and state budgets is the variety of revenue options. According to Florida International University, the federal government is the biggest collector of the majority of tax revenue. However, state and local governments have a larger range of

As the federal debt grows, the search for ways to reduce spending or establish new revenue sources will increase. “If states are to be the laboratories of democracy, they need the freedom, power and flexibility to innovate, create and adapt policies that best meet the needs of their citizens. ”William T. Pound is executive director of the National Conference of State Legislatures. State and Central government will always have a high expense rate.

The United States has a debt of $16.394 trillion and had spent $682 billion in 2012. Also the pentagon had also spent $2.7 trillion and has no trace of where or how it could have been used by the military. The amount spent is unnecessary because being the policemen of the world is not helping fix any of the issues the policemen’s own country has.

Speculate on the primary way in which the federal government could make up any shortfalls if it does not collect its targeted revenue from personal income taxes, and ascertain the most significant way in which the U.S.

It is projected In fiscal year 2015, that the federal government will spend around $3.9 trillion. When measured by the Gross Domestic Product (GDP) it will make up 21 percent of the U.S. economy. According the U.S. Treasury, resource allocation is categorized in three areas: Mandatory Spending, Discretionary Spending and interest paid on