Should the government always balance its budget If you think

Should the government always balance its budget? If you think it should, what steps do you suggest that it should take to balance its budget?

What is the relationship between budget deficits and national (public) debt? Why has the USA national debt been increasing for decades?

Solution

I don\'t think that the government should always balance its budget.

Budget deficit is the difference between what the U.S. government takes in from taxes and other revenues, called receipts and the amount of money it spends, called outlays. The National debt is the overall total of all of the deficits. The government finances a budget through borrowing and when this happens. It is adding to the National debt.

The National debt as a percentage of GDP was down only during the Clinton era while it has peaked during Obama administration. This surge has given rise to serious concerns about the current level of national debt and whether the government programs are sustainable. Around $940 billion was allocated for Healthcare programs like Medicare and Medicaid benefits program. Social Security expenditures amounted to $882 billion in the year 2013 aimed at providing financial security to the retired pensioners of age 65 plus. A sizable portion of national budget was allocated for defense expenditure. In fact all these were pure “spends” and not investments aimed to deliver any long-term benefits.

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