Question

Budget deficits are the rule, not the exception. A budget surplus was achieved in only four years (1998–2001) since 1970. Deficits result from both cyclical slowdowns and discretionary policies. Both forces contributed to the massive deficits of 2009-2011. Our textbook tells us that people worry about the government’s deficit spending. What are your thoughts on deficit spending? Include material about the current deficit spending (2014-2016) in your post.

Answer 1

Budget deficit occurs when government expenditure tends to outpace revenue. it leads to rise in government debt. Government debt has to make huge expenditure to service debt. after financial crisis of 2008, huge expenditure was incurred by the government to restore equilibrium in economy, thus government budget deficit shot up significantly. But gradually, it began to diminishing and it was $ 496 billion in 2014. it increased to $ 585 billion in 2016.

But after 2016, now government budget deficit is rising again. Trump government has decreased taxes for corporate and individuals, Thus, government budget deficit is likely to rise further.

Budget deficit is not matter of worry as long as it is used for productive purposes but it becomes matter of worry when these are used for unproductive activities.