Deficits and Balanced Budgets

Paper Summary:

This paper provides brief synopses of the most important issues for the U.S. economy. Written in a question and answer format, the paper answers ten questions about deficits and balanced budgets. The questions are:
(1) Why is a balanced budget, and possibly a balanced budget amendment necessary...Or is it?
(2) What is macroeconomics, and does it really affect the average citizen?
(3) Why did we have budget deficits for so long?
(4) Is there a way to cut spending and still cut taxes, and keep the surplus as well as getting the budget balanced?
(5) Is there such a thing as a really "fair" taxation system?
(6) If it is sort of unethical to borrow money and not repay it, how can the government do it?
(7) What would you do if you were asked to create a fair and equitable budget strategy, what would you advise?
(8) You say there have been budget shortfalls for years, and now in the last couple of years, all of a sudden, there is a surplus. So, why am I and my family not feeling the benefits of this surplus?
(9) I keep reading about this new European currency called the "euro" and the problems in Japan and how it might affect the trade balance and the stability of the dollar. Is this anything I should be worried about? Or is it just another game for economists to quibble about?
(10) You had to consult a number of books and articles from so-called experts for this assessment of our balanced budget needs. Have you really learned anything?

From the Paper:

"Americans are basically naive about economics. Politicians and Economists duel about surpluses, deficits, the fate of Social Security, interest rates, international trade, and so on. We see headlines that scream that 400,000 new jobs cause fears of interest rate increases, The next day, the headlines about the slowing of new jobs seem to indicate the same (or other) "fears". After more than a generation of budget deficits, now we have surpluses, and the arguments rage about what to do with them. The fact is, a very small, privileged few (Alan Greenspan, head of the "Fed" is one) know what is going on and why, and, furthermore, what to do about it."

More papers on Deficits and Balanced Budgets:

• Research Paper # 21471 : "Federal Budget Process"
• Research Paper # 56703 : "Fiscal Balance During the Clinton Years"
• Book Review # 67140 : "Mirage"

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