Question

In 2-3 paragraphs, respond to the following. Your initial post should be substantive and be supported by course concepts. Your initial post is due by Wednesday to allow other students to respond.

Should the United States government be required to have a balanced budget? What are the long-term implications of continued government indebtedness?

cite references.

Answer 1

Answer - No , the government of US should not have a balanced budget. It should have either the surplus or the deficit budget. The deficit budget keeps the value of currency down and benefits the exports. The surplus budget keeps the value of currency expensive and might reduce exports. The surplus budget means that the outflows of the government are lesser than the inflows. It shows that the country has a greater income and is being managed effectively. On the other hand the budget deficit shows the expenditures over the income.

The government after carrying out the various tasks for the economy , need to have certain funds which could be used in the unforeseen times such as the natural calamities , war condition etc. In such a case , having a balanced budget will be unfavourable condition for the country. Also , in order to have a balanced budget , govt. Might borrow the amount which will create the indebtness for the government. Hence balanced budget should not be maintained.