You shouldn’t spend more than you make. Sometimes, deficit may benefit in a long term. Looking for a flexible role? However balancing the government’s budget should not always be required nor should that be the goal because there are too many variable. I believe that this question is what I consider to be double sided. Most people in the United States are familiar with balancing a budget because they have had to perform that task once in their adult life and it was not easy. Without proper handling, the government’s credit score can decrease, which may cause other countries to caution in loaning to the U.S. by Tao Lu – Friday, August 1, 2014, 3:00 PM. In U.S. there are two ways to balance its budget: collect more or cut the spending. I think the government should always be able to balance its budget. It applies to both personal and business. I agree with your post that the government should keep a budget. It happens daily in society on a much lower scale. At this point with the national debit being as high as it is I would have to say a firm no that I do not think that the federal government should have to balance their budget. Edward Glaeser. I may have to approach this from a personal financial view. Ms. Snowe and Mr. DeMint compare the federal government to a family that supposedly has to balance its budget, and the comparison is actually a useful one. Financial Planners suggest that a family should save 10%, tithes 10% and the other 80% is to purposefully be used for sustaining your life style that you have created. Just like how a family that borrows beyond its means will struggle a lot, so will government deficit spending cause much trouble in the long run and ultimately have the future generation pay for it. So all and all I think it’s a good idea based off of your view points and like you said not in an “always” situation should the federal government have to balance their budget. No plagiarism, guaranteed! would add a budget rule to the Constitution that would require federal spending not to exceed federal receipts Most governments prefer to finance their deficits instead of balancing the budget. by Anand Viswanath – Friday, August 1, 2014, 5:08 PM. This is not an example of the work produced by our Essay Writing Service. So imagine a nation with no budgeting plan. Several proposed amendments to the U.S. Constitution would require a balanced budget, but none have been passed. Government bonds finance the deficit. by Olutobi Osinowo – Tuesday, August 5, 2014, 10:06 PM. Government incomes is generated from taxes, fees, and business revenue. Also I don’t see how it would be enforced.”Response: Strongly Disagree, Larry Samuelson, Yale Any information contained within this essay is intended for educational purposes only. The U.S. national debt is close to 14 trillion dollars. Yes, the US should definitely try to balance its budget. However, for a country is a different issue, sometimes, a lot of spending can’t aviod (e.g. Aug 1st, 2011: "Any federal balanced-budget amendment should allow the government to spend more than it collects in taxes during wars and recessions, with the understanding that it will spend less during peaceful times of plenty. 1. Two panels of expert economists consider the nature of tech companies’ dominance. cut spending on social security, or collect more tax). by Laura Porter – Saturday, August 2, 2014, 4:06 PM. I understand that if the government has to always balance its budget than lowering government spending will be expected. The panelists were nearly unanimous in saying that a balanced-budget amendment would not “substantially reduce output variability in the United States,” but there was less agreement as to whether such an amendment would make borrowing cheaper. At the end, it may slows the economy to grow. Cut the spending means people will get less benifit, there will be less federal employees to do work. ALL RIGHTS RESERVED. Dec 06, 2017. It depends on the situation. The very first thing a person must do to balance their budget is cut down on the amount of money they are currently spending. Managing the budget assures the economic state of our country is intact and prevents a complete failure our government system. I agree with your thoughts on the government balancing their budget. As the United States’ looming deficit continues to dominate the national discourse, many are calling for a Balanced Budget Amendment to be added to the Constitution. Many conservatives have suggested passing a law or even a Constitutional amendment requiring the government to balance its budget. That unfortunately is not the realistic case for America at this time. All work is written to order. Even with modest-sized deficits, it’s possible to stabilize or reduce the debt as a share of gross domestic product, which is the best measure of sustainability over the long run. As a result, government interest rates remain relatively low. To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! If not as you can see from other post it was call a disaster to the government and economy. There is no balanced budget provision in the U.S. Constitution, so the federal government is not required to have a balanced budget and usually does not pass one. Free resources to assist you with your university studies! by Tiffany Allen – Tuesday, August 5, 2014, 10:59 PM. All things in life need to be managed at some point to be proven effective. The debt will eventually catch up with the country and future generations will have to carry that burden. Congress is expected to vote this fall on an amendment to the Constitution that would require the federal government to balance its budget each … With the government’s lack of properly handling their finances it is not surprising that individuals follow their lead with large amounts of debt. The market would not be right, and companies will not be able to run right. “This might raise interest rates if consumers spend more to offset critical services.”, Darrell Duffie, Stanford Net impact unclear.”Response: Uncertain. Registered Data Controller No: Z1821391. To find out, Chicago Booth’s Initiative on Global Markets turned to its Economic Experts Panel with a pair of questions. Many US lawmakers have long voiced concern about the country’s growing debt and the regularity with which the federal government runs its annual budget at a deficit, and some have even suggested the US Constitution be amended to require that the federal budget remain in balance. How would forcing the federal government to stick to a balanced budget each fiscal year affect the US economy and the government’s ability to borrow? If the government does not balance its budget, money will not be distributed properly and the economy could crash. The government should be no different. Spending often must be increased during those times or the economy can get worse. Even though there has been a budget deficit in the United States for years, that doesn’t mean that it can go on forever. Balanced Budget Suddenly Looks More Appealing." Should the ECB prioritize jobs and the environment? If the government increased the taxes, that would decrease income. This could cause a domino affect from the stock market crashing to bad market to a recession and later depression. Instead of making muscle gains, I'm outchea making academic gains. by Lakita Jones – Tuesday, August 5, 2014, 11:27 PM. Policymakers don’t need to balance the budget every year to put the budget on a sustainable path of manageable debt levels. A requirement that the federal government balance its budget or begin paying down the debt is easier to grasp but would impose far more deficit reduction than the economy needs or could bear. Disclaimer: This work has been submitted by a university student. Now the U.S. is in debt and most of its payment goes to the interest. When the United States Senate voted to approve its momentous tax-reform bill early Saturday morning, it did so despite numerous analyses that have suggested the revenue lost to the bill’s tax cuts is unlikely to be made up by economic growth. spending less in defense or joining another war). Every family has to balance its budget. Ok I got a few good answers on why our Government should not balance its budget. “Fiscal measures (e.g. On the other hand, collecting more means more tax. 3. Yes, Government Should Decrease Spending to Balance the Budget. The preoccupation with balanced budgets limits what fiscal authorities are willing to do to boost growth. Copyright © 2003 - 2020 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. US government plays a major role in the analysis and reporting of how well or how poorly the country is managing its financial structures. Should the government balance its budget? To continue to fleece us with interest payments on money the citizens didn't borrow. You made an excellent point about the multiple ways that there are to balance a budget. This could cause a easy access to debt. by Tracy Vaughn – Tuesday, August 5, 2014, 9:00 PM. 3. Such measures are also politically unsustainable. A balanced budget for the Government generally means the difference between government incomes and expenses over an accounting period of one year. We don't care about our kids and how there gonna pay it back. If no budget is in place, overspending and potential bankruptcy is sure to occur. Should the government be required to balance the budget is a good proposition to consider. Should the government balance its budget? “Requiring budget balance would upend current operating procedure, with effects too uncertain to predict reduced output variability.”Response: Disagree, Austan Goolsbee, Chicago Booth Company Registration No: 4964706. I have certain beliefs that say yes and others that say no. In fact, not only should a balanced budget be a high priority policy goal, it should be at the top of the list. Study for free with our range of university lectures! I feel that things operate a little more smoothly as long as I keep up with a continued budgeted balance. "Every family in America has to balance their budget," recently thundered Speaker of the House John Boehner. Last year we were given a clear view of what could happen just over a threat to not meet their responsiblity of paying what they owe. Sometimes, a deficit may benefit its economy in a long run. Get more help from Chegg. Why or why not? That's not always possible, like during a recession when we need spending to stimulate the economy, but right now the US is in an expansion and they should be trying to run a budget surplus by increasing taxes or cutting spending, or both. This is a tricky question. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. by Lakita Jones – Tuesday, August 5, 2014, 11:35 PM. It’s not easy to balance its budget, but continuously to increase deficit is the worst. Even if policymakers passed such legislation tomorrow, they could not bind their successors to it. Previous question Next question Transcribed Image Text from this Question. Yes, the government should have to balance its budget, because that is good, sound fiscal policy. We're here to answer any questions you have about our services. Just as any household or business must balance its spending against available income over time or risk bankruptcy, a government should strive to … Reduced revenue would make it more difficult for the government to balance its annual fiscal-year budget; over 10 years, estimates suggest, the tax bill could add between $500 billion and $1.4 trillion to the national debt. From a finance view, it’s good to balance the budget. No, the government should not be required to always balance the budget. That makes government bonds more attractive than riskier corporate bonds. If the government is not able to balance its budget, then everything will become a complete failure. 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