The Federal Deficit the Causes and Alternative Solutions...

The Federal Deficit: The Causes and Alternative Solutions Why did the government have to borrow so much more in such a short time? Here, six factors that hit the nations bottom line: 1. The Bush tax cuts The biggest culprit? The 2001 and 2003 tax cuts under then-president George W. Bush, says the Associated Press. They have added an estimated $1.6 trillion to the national debt. Its pretty clear, says Brian Beutler at Talking Points Memo, that Bush-era policies, particularly debt-financed tax cuts, make up the lions share of the problem. And theyre ongoing, so the tab for them builds every year. 2. Health care entitlements Democrats constantly harp about the Bush tax cuts, says Peter Morici at Seeking Alpha, but those rates†¦show more content†¦The options are grouped into three major budget categories: mandatory spending, discretionary spending, and revenues. In most cases, the table accompanying an option shows the options estimated budgetary effects in each of the next 10 years, as well as 5- and 10-year totals. The options in this volume come from legislative proposals, various Administrations budget proposals, Congressional staff, other government entities, and private groups, among others. Because the spending options in this volume are intended to help lawmakers review individual programs, they do not include large-scale budget initiatives, such as eliminating entire departments or agencies. The options are intended to reflect a range of possibilities, not a ranking of priorities, and the report does not provide an exhaustive list of policy alternatives. The inclusion or exclusion of a particular policy change does not represent an endorsement or rejection by CBO. In keeping with CBOs mandate to provide objective, impartial analysis, this report makes no recommendations. Budget Decisions: The Current Context Over the past 40 years, federal debt held by the public has averaged 35 percent of the countrys annual economic output (gross domestic product, or GDP). Because of massive deficits during the past few years, that ratio climbed to 62 percent by the end of last year, the highest level sinceShow MoreRelatedHow Government Economic Policies Caused the Financial Crisis of 20081553 Words   |  7 Pagesthe government agencies led to the crisis. According to reports by Taylor (2009), excesses monetary policies were the main cause of the 2008 financial crisis. He reports that, in 2003-2005 the federal reserves held its interest rate target below the well known monetary rules that state that historical experiences should be the base of a good policy. 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