High Budget Deficits Date A deficit is any amount short of any fixed reference point. This may be amounts short of the required spending by the relevant governments; they may as well be the amounts less of the expected revenue collection from the revenue collection tools (Associated Press 2010)…
Download file to see previous pages...
Budget deficits, on the other hand, are the amounts in deficit of what the individuals spending, government or even a companies or corporations spending are short of the planned incomes from the entities sources. In another name, deficit spending may be the other terminology of budget deficits. Over the past years, budget deficits of countries, most so the developing countries, have attracted a lot of publicity. This has been majorly witnessed over the past two decades of which financial restructuring and turbulence have been witnessed (Associated Press 2010). The country where the impact is witnessed is attributable to the assorted financial ills bedeviling such countries; the countries base their expenditures from high debts due to extensive borrowing, high and ever growing rates of inflation and investment problems attributed to poor investment and their poor growth performance of such investments (Associated Press 2010). The poor government financial position, most so in regards to budgets, results to poor economic growth rates. The factors that fuel these rates are the poor growth of government revenues due to poor collection measures and tools. The budgeting process, which is not well structured, is also blamed for it in a major proportion. Others include the levels of economic development, which is low and unstable. World macroeconomic shocks, like the Great Depression and poor ways in which the government controls its expenditure, have in the past been witnessed to impact on the government financial position (Associated Press 2010). The methods used to finance any form of budget deficit will always result into an imbalance in one way or the other. For instance, if local borrowing is used, then the crowding out effect of the private investments occur leading to the collapse of the private firms which may even end up causing more harm to the economy. The budgeting process of most countries has so many loops and is, therefore, responsible for most countries budget deficits apart from the government participation in most economies and even the other factors as discussed above. According to reports, it is in record that budget deficits have several impacts on some economic sectors, such as private consumption, private investments, the T-bill rates, current account, and even money supply into the economy (BBC 2010). The aspects that the deficit has impact on as discussed above are major pillars for the measure of any economic growth of a country. Budget deficits have been recorded to reduce money supply into the economy; this majorly results when domestic borrowing is given an upper hand (BBC 2010). Intensified domestic borrowing may also lead to the collapse of private sector firms as a result of crowding out effect. I may, therefore, comfortably conclude that budget deficits in any economy are harmful to economic growth rates since they lower the growth rates. The causes of budget deficit are many and they include most major government stakeholders (individuals, companies, and corporations) who evade taxation. It is in record that many US firms use the fair share of the infrastructure by the government but they don’t pay their fair share of the taxation; they use the roads, defense, grants and even emergency services (BBC 2010). Despite the companies making huge profits from the countries resources, they try as much as they could to evade
...Download file to see next pagesRead More
Cite this document
(“High Budget Deficits Essay Example | Topics and Well Written Essays - 1500 words”, n.d.)
Retrieved from https://studentshare.org/macro-microeconomics/1444479-high-budget-deficits
(High Budget Deficits Essay Example | Topics and Well Written Essays - 1500 Words)
“High Budget Deficits Essay Example | Topics and Well Written Essays - 1500 Words”, n.d. https://studentshare.org/macro-microeconomics/1444479-high-budget-deficits.
The process of budget preparation is often complex as it requires inclusion of various aspects of the financial nature an organization. Budgets are mostly prepared during the late periods of a given financial year in order to depict the costs of the intended programs by the planning committees of given organizations The main aim of this paper is to answer questions of what factors and consideration are taken into account while preparing a budget and future prospects of the budget.
This is possible because of the feature of technology that it out dates as soon as new breakthrough is made. According to the writer we are now living in the age of technology and growth is very much dependent on it. The rate at which technology is changing is significant here.
According to the essay, the deficit financing is good during crisis times to bring the economy out from stagnation but harmful if it is employed in a sustained basis year after year for the unproductive causes. Still, the underlying causes for which deficit budget is made certainly matter, regardless of the state of the economy.
The author claims that increasing government spending may cause a budget deficit but it also has some benefits. For example, the government may choose to create jobs in certain areas. Therefore these people may no longer be relying on the government for money. This seems to reduce government spending in the form of benefits.
It is imperative that the government’s deficit is mainly financed by borrowing from the public through selling of bonds. In addition it can b financed by borrowing from the central bank. There are diverse budgetary deficits, which include revenue, budgetary, fiscal, primary and monetized deficits (The Moment of Truth, 7).
This discussion not only highlights these laws around the world that have helped to make public sector enterprises more transparent but also provides recommendations for more effective legal framework to enhance the functioning of fiscal and budget procedures and processes.
Yet, a growing economy requires an ever-increasing amount of money, and without it the economy would grow stagnant and refuse to grow. Government spending, and government debt, does have the capacity to fuel the economy, but there are also other
e long-term growth and investments that are important to the country’s future, Obama administration budget focuses on health care, energy, education, and matters that can build a foundation for long-term economic growth. This statement openly opposes the short-lived
In explaining his domestic agenda Obama contests that, “Just as it would be a terrible mistake to borrow against our children’s future to pay our way today, it would be equally wrong to neglect their future by failing to invest in areas that will determine our economic
Once a given ministry, deliberates on budgetary requests an order request is sent to the ministry of finance. As indicated in the flow chart, the request of payment is received and registered in the receipts book for
2 Pages(500 words)Essay
GOT A TRICKY QUESTION? RECEIVE AN ANSWER FROM STUDENTS LIKE YOU!
Let us find you another Essay on topic High Budget Deficits for FREE!