Question

Work through the National Budget Simulation in an effort to achieve a budget deficit of $1100B dollars.

Scenario: The President of the United States has been elected on the promise of fiscal responsibility. By law he cannot reduce the net interest paid on the debt. The President's budget is projected to leave the country with a $1100B deficit.

The United States is subject to global security concerns. At the same time, a lingering recession and financial markets rescue package reduces the government's tax revenues and forces the government to increase its spending on unemployment benefits, welfare, housing assistance, food stamps, and other need-based programs. Because of the increased spending and reduced revenues, the nation falls into a projected deficit of nearly XXX in 2015 (This is the first piece of the information you need to find).

The President is committed to keeping his campaign promises in order to avoid future crisis over the US's financial standing. He must raise taxes, cut spending, or a combination of both to stay within his new guideline of a deficit below $1100B. The President turns to you, his trusted economic advisor, for help. (Note: While some events in this scenario reflect actual events, others are hypothetical for the purposes of this exercise. Budget figures in the simulation are actual White House figures of 2012, including spending and revenues of 2012.)

Given the information you watch and read in the preceding Module 7 activities, use that background to answer the following questions for discussion. Since the simulation is using 2012 numbers, start off with actual numbers just to inject a sense of reality into this discussion. Research this information from a reliable source and begin your analysis with what you found. Detail your choices for cuts and spending, paying close attention to what you read in the Bowles and Montgomery articles. Finally, analyze the effect your choices will have on the economy.

Answer 1

The federal budget delict reduced to $483 billion last yea,the least level as a share of the economy since 200,before the great recession due to higher tax revenues,the shortfall for the fiscal year which ended in delict was September less than the $680 billion in 2013 The good news has come when government spending has increased a bit and government has given up "harmful excessive budget austerity "policies like the 2009 stimulus package the affordable care act,the continuation of the George W.bush-era tax cuts have helped the us economy recover from the grievous period of recession which has lead to more tax revenue and reduced budget deficits .Government expenditures increased to $3.5 trillion in fiscal 2014,George is 1 percent increase from the last year whereas tax receipts,rose to $3 trillion ,that is 9 percent over fiscal 2013 owing partly to decrease in that levels and enhanced economic growth