Economics: Balancing the Budget

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Sam Friedman

Balancing the Budget

The federal budget can be interpreted in a very simple terms. Comparatively, the federal budget is like any person in the United States who has a job earning revenue, and spends his money on things that he needs. The same is true with the federal budget of the United States; it takes in revenue and spends money. The predicament that is going on in our certain situation is that, our spending is much higher than the amount that our government is taking in, causing a very large deficit. The policymakers of America are working to get the budget back to a more reasonable level. In order to balance the budget, the United States needs to be rid of its gargantuan debt. “Eliminating deductions will be very difficult. It’s almost the whole game”. ( Greeley). One thing that both Mitt Romney and Barack Obama suggested during their campaigns was the elimination of tax deductions and loopholes. Although the possibilities that these reforms get done are very slim, the amount of tax revenue that the government would obtain would be astronomical. The termination of loopholes and deductions is not ideal to the common taxpayer. When a deduction is put into place, taxpayers get a sum of money in return. Accountants scavenge through their clients taxes, searching fro ways to get a portion of money back to their clientele. With these deductions in place, the government loses a lot of possible revenue. This is where the Bowles-Simpson reform program comes into play. In the reform that the two policy makers created in 2011, the rate of taxes on companies on individuals would decrease, but the deductions would be eliminated.