Public Budgeting Systems - Essay Example

If the government’s new debt can be increased at a high-interest rate, this would offer economic prosperity and other possible benefits may be realized in case the interest rates decrease such as transforming the conditions of the debt that may permit the local government of Seattle to revise their payment plan that may assist with short-term budget demands. Refunding debts to substitute a lower interest rate may pose some economic merits, if other transformations are made, like the term, there is a probability that there will be a net rise in the debt costs over the debt’s term.

Furthermore, another refunding or reorganization tactic is the reduction of the overall expenditures gained by the government. This would establish an additional financial base that should be diverted towards settling the city’s debts. In order for the federal government to decrease the high debts, it is vital that alternative funding options are created in order to support its debt obligation. The federal government may provide financial help in quarterly or annual terms. Another alternative is for the city to try to maximize revenues gathered (Shapiro, 2004).

My budget choice compared to the federal government budget My budget has a defined goal that I have to achieve within a specific period. Just like the federal government budget, I identify the basis and amount of income and money I allocate to events that are very significant since they determine how the cash flow events take place. I balance my budget in order to avoid getting into debt. On the other hand, the federal government is forced to borrow when faced with events such as war and economic downtown; this, in turn, increases the national debt.

On my part, I try hard to avoid budget deficits by saving in advance and relying on my farm produce. Summarily, the evaluation of the process of debt capacity determination has shown that in order to get the debt capacity of a state, it is important to look at the most essential factors, which include the value of the property, population, and income. Refunding or reorganization of the existing debt obligation could decrease the overall debt of the government. Critique 1 It is true that a budget is an itemized summary of intended expenditures of a certain period with proposals for financing them.

Further, I concur that the budget deficit is inevitable because of spending usually outweighs income. This, in turn, makes the government increase taxes, raise debt ceilings, consolidate public debt and decrease spending. In order to avoid spending, I concur that it is rational to include major budget cuts in departments such as The Executive Office of the President, Department of Housing and Urban Development, Department of State and Department of Treasury and Department of Defense. Critique 2I agree that America is spending more than it is bringing in.

This practice usually plunges into a financial crisis. As we can see, debt can only ruin you, whether it is in your household, city, or nation. In addition, I agree that in order to avoid debts or bankruptcy, we make sure to pay our credit cards and we really try not to take out loans for school and vehicles. If an individual were to run a deficit on his or her household that implies that an individual is spending more than he or she is making. Consequences for this would be bankruptcy, credit destroyed, and our house and vehicles could be taken away.

It is significant to note that in order to avoid debts or bankruptcy it is rational to introduce budget cuts in every department as this will reduce spending.