1. What are the three major categories of revenues for the federal government? Please comment on each and indicate their relative importance to each other. Relative importance can be indicated by dollar amounts, percent of total revenue or expenditure or, though less informative, by ranking…
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Apart from that 40 percent is contributed social insurance taxes. Total revenue earned by the government had reached its highest peak in the year 2000 with 20.6. However due to the recession the US economy had witnessed a dip in its revenues to 14.8 percent in 2009. The contribution of individual taxation had reached its lowest level of 6.4 percent in 2009. It has been projected by the Congressional Budget Office (CBO) that revenues will increase by almost 23 percent in 2011 (The Revenue Outlook, n.d). 2. What are the three major categories of expenditures for the federal government? Please comment on each and indicate their relative importance to each other. Relative importance can be indicated by dollar amounts, percent of total revenue or expenditure or, though less informative, by ranking. Government expenditure is also a very important part in the budget of the government. It is an essential requirement for the government to plan their expenditure accordingly so as to steer the economy towards increasing economic growth. As government invests in the crucial sectors of the economy, one can observe that government expenditures have been increasing over time. In the year 2009 it was seen that the federal government had spent $3.518 trillion which accounted for 24.7 percent of GDP for that particular year (Arnold, 2010, p.232). There are several areas where the federal government directs its expenditures. They are consumption expenditures, transfer payments, social benefits of governments, social security schemes, Medicare benefits, unemployment benefits, subsidies, grants to state and local governments, and military expenditures (Federal government receipts and expenditures, 2010). As government spends in different area its sources of financing also varies. Like in case of Medicare, it is financed through Medicare payroll tax premiums and general revenue which is mostly income tax (Potetz, 2008). 3. Discuss the current level of the Federal debt, and the past trend of the debt level. Discuss whether or not you are concerned about the current and future projected debt and level of associated interest expense. It has been observed in the past few years that there has been an increase in federal debt more than the output of the nation. The main factors responsible for this debt were imbalances between federal revenue and spending leading to recession and economic turmoil, reduced revenue and increased spending as a result of the above economic conditions, and as a result of different types of costs emerging in response to the economic conditions. If the level of federal debt goes on increasing then it is an alarming situation for the economy as it might lead to fiscal crisis. If there is a fiscal crisis then confidence of the investors on the government will receive a set back and the economy will suffer. If the current debt is compared with that seen between the periods covering the World Wars then it is less. The recent jump in debt is 25 percent of GDP. It was projected by CBO that 62 percent of federal debt will be held by the public. Further it has been
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In the past two decades however, China has began to rise in both military and economic strength. What once was a hegemonic power in the world, the United States has started to see an eroding by eastern ideology. China is not only able to manipulate the yen, but also able to hold control over the business sectors via way of the government.
It is in this context that Fiscal Policy is considered as the measures adopted by the government to adjust its level of expenditure with the purpose to monitor and thus influences the economic growth (Gupta, 2007). Similarly, Monetary Policy is the action taken by the central banks of nations, boards or other regulatory committees those are in the authority of determining the size and rate of the money supply which affects the interest rates.
The US is experiencing weak economic growth, unemployment, and stock market instability, which are raising serious concerns about the state of US economy. The continuing challenges in the labor market and the account of the debt limit emphasize the problem faced by the state; unsustainable debt mount for the future.
For instance, in various countries and nations, the highways, the railways, electricity, public education and telecommunication systems have been established by governments utilizing significant key supports. Many medical advances and high technologies have been outsourced from the basic-research funded by the governments.
In fact, due to their centrality to the security and other interests of the U.S and its citizens, these issues have attracted a lot of interests, resulting not only in heated debates and numerous controversies but also anxiety in the U.S public. For example, most U.S citizens wonder what exactly the Iran threat is.
Warren (2012) also noted in his book that managers who anticipate enjoying easily attainable goals and standards often introduce budgetary slacks in the budget. The existence of budgetary slacks in an organization’s budget may adversely affect the performance of the organization through the following: limitation of employees’ evaluation, ineffective planning, underperformance by the employees, and the derailment of correctional measures.
For this matter, understanding the Social Security Trust fund and the means by which it operates, manages debt, and has evolved over the past years to represent what we see today is extremely important facet of understanding the future of governmental finance, taxation and prospects for retirement both for the current generation of retirees as well as our own generation.
Changes in the respective economic policies would boost the fortunes of this entity. The American economy’s performance is unpredictable following a lengthy recession (Shalal-Esa, 2009). However, the Federal
ary policies affects the company demand levels, liquidity stability, financial imbalances fluctuations even as Dell remain as the preferable entity to most customers (Bean, 2004). As a result, changes in monetary policy measures as a way of influencing the competitiveness of
Even though we have become financially stable, I have never lost sight of the fact that my family and I would not be where we are today without the kindness of others and the help of the government.
Even as I child, I tried
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