Federal government budget rapidly at the present time

Assignment Help Business Economics

Reference no: EM131202002

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 reductions in government spending and entitlement programs and rapidly move towards a balanced budget, (although they have never actually produced a budget proposal in which tax revenues would match government spending plus entitlement transfers). Many Democrats, while arguing that tax rate increases on high income earners need to be part of the any deficit reduction program, have agreed that we need to initiate budget deficit reduction 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 sharp increases in federal income tax rates?

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

Reference no: EM131202002

Questions Cloud

Calculate the equilibrium price and for good : Suppose the demand function for a product is Q= 200 -15P + 4I where P is the per unit price of the good, I is median household income in thousands of dollars, and Q is the number of units demanded per month. Use the equation and assume that median fa..

Is the law of demand met and good normal or inferior : Assume that products A and B are produced in competitive markets by different firms and are close substitutes. How would an increase in the price of product A affect the price of product B, and total expenditure on product B? Is the Law of Demand met..

The levels of consumption before trade : Suppose that without trade, France is producing 50 units of cheese and 25 units of oilves, while Spain is producing 150 units of cheese and 100 units of olives. Now assume France specializes according to its comparative advantage and produces the max..

What would be the real wage of the workers in two countries : Suppose in the United States, one worker can produce 10 tons of steel per day or 20 tons of chemicals per day. In the United Kingdom, one worker can produce 5 tons of steel per day or 15 tons of chemicals per day. The United States has 30 workers and..

Federal government budget rapidly at the present time : 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 reductions in government spending and entitlement programs and rapidly move towards a b..

Estimated the costs of a batch of fried chicken : KC, a fast-food restaurant, serves fried chicken, fried fish, and French fries. The managers have estimated the costs of a batch of fried chicken for KC's all-you-can-eat Friday Fried Fiesta. Each batch must be 100 pieces. If management decided to re..

Marketing coverage can be intensive-selective or exclusive : Marketing coverage can be intensive, selective, or exclusive. Coverage coincides with convenience, shopping, and specialty products. Review the definitions of coverage and type of product before you start. List two products for each coverage category..

Company sells identical radial tires through two channels : American Tire and Rubber Company sells identical radial tires through two channels. Marginal Cost is a constant $10 per tire, regardless of the sub-market in which the tire is sold. The firm has estimated the following demand curves for each market: ..

Differences in age between husbands and wifes : a. Differences in age between husbands and wifes ( husband age minus wife age) of married couples have a distribution that approximately follows the normal curve with a mean of 1.5 years and a std of 2.1 years. negative differences indicate that t..

User Account

All Pages