The United States deficit, surplus, and debt will always have an impact on taxpayers. In the state of high deficit the government seeks ways to cut and save money for debt payment. The government does this by pulling funding from programs that have little government impact. Increasing taxes also supplies the government with extra income. In addition to the reduction or elimination of certain tax credits, the government analyzes school funding for cost effectiveness. Each step the government takes has a trickling effect on taxpayer’s dollar. The Effects of U.S. Deficit, Surplus, and Debt
When a surplus exists, the government has extra funds to spare and infuse into the economy. This surplus will increase government programs. When the government has a surplus it focuses on its needs by order of necessity, similar to the way individuals do when they have extra money. This can lead to new tax credits for taxpayers. However, when the nation is in debt the taxpayers are also in debt. The government uses tax money to finance their operations. If debt increases taxes go up, if debt decreases taxes lower for most. Effects on Future Social Securities and Medicare
Taxpayers are affected by the U.S. deficit when there is a shortfall in revenue, which is the result of the National Debt increasing. Surpluses also have an effect on taxpayers as well. Programs like Social Security and Medicare receive government funding from tax money. Social Security takes contributions made by citizens to accumulate a surplus, which it uses to buy government bonds, which are government debt. These bonds accumulate and eventually mature. The money from the mature bonds helps to pay retirees. As American citizens contribute money into Social Security, the bond purchases mean that the government owes the Social Security program the value of the bonds purchases (Colander, 2010). The debt reported by the government for this purchase, however, is for on-budget accounts, while the U.S. reports...
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