Strategies to Reduce the Federal Budget Deficit

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Recommended: Introduction to national debt

Since the early 1970’s, Americans have had trouble controlling a huge money issue. The United States government has engaged in deficit spending. This occurs when spending exceeds the amount of income taken in (“Budget”). American politics have been trying to come up with ideas that the government can implement to fix our current deficit issue. Some strategies that the government may use are spending less, collecting more taxes, and balancing trade (“Atkins”). The federal deficit has become a big issue and Americans must try everything to reduce the debt. We must come up with a plan that will strive for a balanced budget. One way the government can reduce the deficit is by spending less. Americans are known for spending. Whether it is on necessities or just simple wants, money is thrown out. Most of the time, we spend more money than what we really have. When you spend more than ones income, it causes a big problem. This is the main cause of the federal deficit. America has been spending more than its actual income. Every year, nearly $200 billion are thrown away through fraud, waste, and mismanagement. A lot of money is spent on unnecessary programs such as NASA etc. The set budget for the year of 2014 is $17.6 billion (Congress approved). This is money that can be spent on better options such as education or simply paying off the budget. In order to reduce the amount of money owed, the US must spend less. Spending less will allow the economy to recover and possibly pay off its debt. The US government income is earned through the collection of taxes and revenue (“Budget”). When this amount is surpassed, the country goes into debt. A major cause of the federal deficit is the insufficient amount of money available to pay off these debts. Personal income taxes are the largest portion of total tax revenues. Just in 2011, $1,091.5 billion were made. The second largest sources are Social Security and Medicare making the total tax revenue a total of $2.3 trillion (2011). The amount of tax revenues earned in a year is enough to pay off the U.S deficit. Due to the mismanagement of money, this isn’t possible. If the government implemented higher taxes, they might be able to slowly reduce the deficit. Although many Americans might not like this idea, it’s necessary in order to get the country out of this issue.

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