Efforts to Reduce the Budget Deficit

Efforts To Reduce The Budget Deficit

This week’s assignment is to write a paper that supports the current debate between the White House and Congress regarding the necessary measures to address the spending and revenues.

Our text states, “Between 1980 and 1993 budget deficits grew steadily in dollar terms, and the nation debt tripled. Since 2003, the public debt has grown by more than $500 billion each year; as of July 2012, nominal U.S. GPD was $15,880 billion (Amacher & Pate, 2012).” This means that our debt is getting bigger and bigger. In 1981 the GPD was at 32.8% and it sky rocketed to 72% back in 1993 and just in 2012 it was almost at 100%. From what I can see the debt is growing very quickly. In less than ten years the ratio of debt to GPD has grown by almost 30%. Fiscal adjustments plans must be designed a way that makes them sufficiently flexible and resilient to be able to absorb the shock and preserve consolidation objectives especially when the economy turns out differently than what had been expected. For Fy in 2014 the U.S. Federal budget deficit is supposed to be $744 billion, only due to the fact that the U.S. Government spending is budgeted at $3.778 trillion when the government will on be bringing in $3,034 trillion. This is going to be a problem not for just the government but everyone in the country.

The Gramm-Rudman-Hollings Act was passed in 1985. This act set a time limit for lowering our country’s debt. If the requirement was not met at the end of the year caused some cuts in most of the federal spending. The president and congress were only required to meet the target in the projected budget not the actual budget. Tax revenues started to increase as well in 1990 and there was a sudden slow down to spending. Things just kept getting worse on our deficit. The attacks that happened September 11th increased the government spending since we had to deploy all the