The Pros And Cons Of The Federal Budget

1124 Words5 Pages
Federal budget is the amount of money that will be spent on all sorts of expenses in the upcoming year. It reflects the financial performance of the country. What is a balanced federal budget means? Balanced budget is the total amount of government revenues equal to the total amount of government expenditures. If the government revenue more than total amount of government expenditure is known as budget surplus. Conversely, government revenue less than government expenditures is known as budget deficit. Taxation and government expenditures which are direct influence the economy of a country in both short term and long term. Most countries are faced the budget deficit state, the government proposed the balanced budget amendment in order to close up the gap. The approaches to balanced federal budget are to raise additional revenue or to cut spending. (Roth, Fellow & Institute, 2011) In the following, there will discuss about…show more content…
The government would tend to relying on borrowing from other foreign country when they faced a budget deficit. The crowding out effect started which would cause a huge burden to the country that is government did not allocate enough money for public goods and services, which will influence the economic growth. The country will have a wider deficit and higher debt pressure. (Ingram, n.d.) In conclusion, should the federal budget always be balanced? To sum up all the points above, I would to say that the federal budget should always be balanced, based on the many advantages that have been discussed above. A balanced federal budget will benefit our country such as enhancing the economic foundation and reduces the volume of federal debt. If the government does not control their spending and this will cause the country become bankruptcy. On the other hand, when the government can manage their spending well then the country will prosper and the growth potential of an
Open Document