Question

What are some of the arguments for and against requiring the annual federal government budget to be balanced

Answer 1

ANS:

• A Balanced budget is a situation in the financial planning or to the budgeting process where the total expected revenues are to equal to planned the spendings. This term is most frequently applied to the public sector budgeting.

Generally is is a budget that has no budget deficit ,but could possibly have a budget surplus. As many economists argue that moving from a budget deficit to a Balanced budget decreases interest rates, increases investment, shrinks trade deficits and also helps the economy to grow faster in the long term.

Many mainstream economists doesn't believe in the US Government debt requires urgent attention in the form of a Balanced budget. Only few of the economists are gaining there attention with the argument that it doesn't matter whether a government that prints its own money balances it's budget.

As the ever rising US debt will eventually cause investors to question the government ability to repay it's debts , resulting in the surging interest rates that will quash private-sector investment as well as the economy. If the interest rates rises too quickly, the government would find it very difficult to afford interest payments on teh national debts , leading to default or still higher inflation as in the long run.