Balance the federal government budget

Assignment Help Macroeconomics
Reference no: EM131049012

Each year since winning control of the House of Representatives in the 2010 election,Tea Party Republicans have argued that we need to immediately initiate sharp reductionsin government spending and entitlement programs and rapidly move towards a balancedbudget, (although they have never actually produced a budget proposal in which taxrevenues would match government spending plus entitlement transfers). ManyDemocrats, while arguing that tax rate increases on high income earners need to be partof the any deficit reduction program, have agreed that we need to initiate budget deficitreduction now.

A) What is the argument against attempting to balance the Federal Government budget rapidly at the present time via either deep cuts in Federal Government spending or sharpincreases in federal income tax rates?

B) Does this argument imply that budget deficits don't matter in the long run? If not, whymight the impact of large deficits predicted in the long run under current tax andspending programs be different than the impact today? Explain.

Reference no: EM131049012

Questions Cloud

Examine two examples from different design periods : Examine, compare and contrast two examples from different design periods related to the selected topic. The examples can be drwan from advertisements in magazines,window displays, posters, etc.
Opposite ends of a north-south shopping mall : Two hamburger restaurants are located at opposite ends of a north-south shopping mall. From end to end, the shopping mall is 1/2 mile in length. Restaurant North and restaurant South each sell hamburgers for $5.00.
Adapted to the changing climate in the securities industry : How has Morgan Stanley adapted to the changing climate in the securities industry? Discuss the impact of changes in securities industry regulations and how they affect the competitive environment.
Balance the federal government budget : What is the argument against attempting to balance the Federal Government budget rapidly at the present time via either deep cuts in Federal Government spending or sharpincreases in federal income tax rates?
What price should a share sell : The risk-free rate of return is 6%, the required rate of return on the market is 12%, and High-Flyer stock has a beta coefficient of 1.0. If the dividend per share expected during the coming year, D_1 is $2.00 and g = 4%, at what price should a share..
Accounting break-even level of sales if firm pays no taxes : Modern Artifacts can produce keepsakes that will be sold for $60 each. Non depreciation fixed costs are $2,500 per year, and variable costs are $30 per unit. The initial investment of $4,000 will be depreciated straight-line over its useful life of 5..
How to write a business case for innovation : How to write a business case for innovation. create a Business scenario, or perhaps your own business/organisation, and provide estimates of timeframes, running costs and benefits, personnel required
What is your combined tax rate : Your company generated $400,000 in taxable income for 2015. Assume that your average Federal tax rate is 25% and your State tax rate is 8%. What is your combined tax rate? How much Federal tax do you owe?

Reviews

Write a Review

Macroeconomics Questions & Answers

  Inflation targeting be a good policy

Why might it be difficult for the Fed to formally adopt inflation targeting?  Would inflation targeting be a good policy for the Fed in the present economic environment

  In using the taylor rule

In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?

  Describe the present economic crisis situation in europe

Describe the present economic crisis situation in Europe.  Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..

  Long-term federal government budget problems

Question:. Explain why there are long-term Federal government budget problems. Explain why the base-line forecast of the CBO is misleading.

  Derive and compare demand curve

Question based on Derive and compare demand curve,  Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?

  Problem based on utility function

Problem based on  Utility Function - Problem,  Answer and explain the following using a diagram which is completely labeled.

  Laffer curve : tax rate and tax revenue

Question based on Laffer Curve : Tax Rate and Tax Revenue,  Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change?

  Problem - income elasticity of demand

Problem - Income Elasticity of Demand,  Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5

  Positive balance of payment

Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."

  Effect of recession on the investment curve

Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.

  Affect of falling domestic investment on trade surplus and

How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.

  Crises in the banking sector and bank run

Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd