CFC Impact of Budget Deficits and Implementation of Budget Reforms Research Paper

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wevpuneqf444

Humanities

Central Florida College Winter Park

Description

Length: Five (5) Type Written Pages. Double-Spaced. (APA)

DUE DATE: November 6, 2020

BUDGET DEFICITS, PUBLIC DEBTS AND BUDGET REFORM: A REALITY CHECK

Budgeting is a critical component of governance, whether it is on the federal, state, or local levels of government. Because of budget deficits and continued borrowing, governments have sought a complete overhaul of the budget process to make it more efficient, more manageable, and more disciplined. The deficit fundamentalists are right that the debt cannot be allowed to grow forever. And the government cannot set budget policy without any limiting principles or guides as what is and what is not possible or desirable.

REQUIRED:

  1. Why has budget deficits become the normal for federal, state, and local governments?
  2. How does the federal government finance its public debt? Explain your response.
  3. How does the U.S. Virgin Islands government pay-off its public debt? Explain your response.
  4. Why have budget reforms failed in the past?
  5. What are the benefits of budget reform if implemented successfully?

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Explanation & Answer

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BUDGET DEFICT AND REFORMS

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Budgeting: The Impact of Budget Deficits and Implementation of Budget Reforms.
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BUDGET DEFICT AND REFORMS

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Budgeting: The Impact of Budget Deficits and Implementation of Budget Reforms
A budget is a financial strategy used to manage the acquisition, spending, and savings of
income through a particular period. Budgeting can be at an individual level, for a business, state,
or a national level. A budget is essential in planning for future investments and avoiding bad
debt. Budgeting at a national level is usually yearly. National budgets at a national level can
either be; balanced, at a deficit, or a surplus budget. A balanced budget occurs when government
expenditure does not surpass revenue. Budget deficits show increased spending exceeding
income, and the surplus is an increase in revenue instead of expenses. A budget deficit is
becoming an ordinary status for several governments. Governments are embracing budget
deficits as a strategy to benefit their economies. A steady increase in a budget deficit often
results in public debt. Budget reforms are essential in paying off public debt but are prone to
failure with the wrong implementation.
Government Budget Deficits
Government spending covers a range of necessities such as; health insurance,
infrastructure, national defense, and education. Taxes comprise the largest percentage of federal
government revenue; about 50% of revenue is from individuals' income taxes. Other sources
include grants and fees, which apply to local governments. A budget deficit is a result of
expenses that surpass the tax revenue of a country. Governments often use the term "deficit" in
spending even though the word can apply to organizations. An unpaid deficit adds on to a
government's debt. Governments often run on a deficit during recessions when tax revenue is
significantly low. However, operating on a budget deficit is common for governments at the
local, state, and federal levels. Budget deficits...


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