Reference no: EM13760588

Please follow these instructions:

1. Go to the National Priorities Project

Review the material contained in "Federal Budget 101: Why Should You Care About the Federal Budget" includingthe sections on the "Federal Budget Process, Where the Money Comes From, Where the Money Goes, Borrowing and the Federal Debt, as well as the Federal Budget Glossary."

Also on the National Priorities site complete "Your Federal Income Tax Receipt" to find out where the federal government spent all the money you paid in income taxes for the tax year 2013. You will be asked to enter information on "Your Federal Taxes Paid." Simply enter a figure such as $1000 if you didn't pay taxes or don't remember how much you paid. Make sure that you view the tax receipt for California.

2. The Center on Policy Attitudes at the University of Maryland has created a US Federal Budget exercise which allows you to design the federal budget, analyze and government revenues for Fiscal Year 2015. Complete thisbudget exercise to learn the basics of the current federal budget.

3. Then take the Federal Budget Challenge which is an online interactive exercise in which participants learn how difficult it is to balance the federal budget over a ten year time frame starting in fiscal year 2013. "The goal of the Federal Budget Challenge is to reduce the amount of annual deficits over the next 10 years. Your starting point will be the Congressional Budget Office estimate for these deficits under current law -- assuming Congress and the President pass no legislation over that time."

Now you are ready to complete your Budget Post. In your post address the following issues:

1. With regard to the US Federal Budget exercise (2 above) describe your projected spending and tax choices for 2015. What was your budget deficit for 2015? Be sure to include any changes that you made to Social Security.

2. With respect to Federal Budget Challenge (3 above):

-Summarize the budget policies that you implemented to achieve your results with regard to specific areas of the budget: Social Security, Medicare, defense, etc. Discuss your spending as compared to the most popular choices and the status quo.

-Discuss your choices with regard to revenue. Did you cut tax expenditures, implement tax reform, etc. How do your choices compare to the popular choices, and the status quo?

-Report the total deficit reduction that you achieved upon finishing the Federal Budget Challenge? What was your total spending and revenue?

-Did the choices that you made in the Challenge tend to be "popular" or unpopular? Were your choices based on economic reasoning?

-Please attach the summary/screenshot of your results from the Challenge to your post. You can take cell phone pics of your results, and collect them in a Word or PDF file if you like.

3. Utilizing economic reasoning explain how you would "fix" the Federal Budget. Discuss your views regarding future budget tradeoffs. Where would you make major cuts and why? For example: Should additional tax revenue be used to reduce federal borrowing? Should the federal government invest more in research and development? How should we secure Social Security and Medicare for future generations? Should we increase or decrease national security funding in the years ahead?

What will happen to the Federal Budget if the Federal Reserve allows interest rates to rise to more "normal" levels? Explain.