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If the federal government wished to reduce the deficit to any significant degree without raising taxes,...

If the federal government wished to reduce the deficit to any significant degree without raising taxes, where would the reduced spending likely to have to come from?

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Answer #1

If there is a defecit in budget the government have to either increase taxes and collect more revenues or decrease their government spendings.

In this US should see that any reduction in government spending should not effect the growth.

So the government will reduce the subsidies that they provide to people on certain goods and also reduce the pension spending which makes the people to work longer and increase the production which in turn leads to economic growth.

It also can reduce social welfare budget and community development spending as it has to first reduce its spending so these are also better options to reduce spending.

In remaining areas like defence, education, health care etc it cannot reduce government spending. So most of the reduced spending will likely to come from social welfare . community development, subsidies and pension spending.

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