Budget Deficits

For as long as most Americans can remember, the United States has been in debt. Previous presidents have tried to reduce our country's debt, but Americans are starting to question whether our country will ever be economically stable. In 1978, the Full Employment and Balanced Growth Act was passed. It listed economic goals that dealt with price stability, full employment, increased real income, and balancing of the federal budget. Balancing the federal budget means that the government collects the same amount of money, in taxes, that it spends a year. However, America has failed to balance its budget and "recent deficits have been of record proportions" (214). The federal government is digging a deeper and deeper economic hole.

Tuesday's debate focused on whether federal budget deficits matter. Greg represented the affirmative side and argued that budget deficits are, indeed, hurting the economy as a whole. Greg's argument focused around "the crowding out effect" and he asserted that budget deficits reduce private investment, resulting in a decrease of the expansion on America's capital stock. A decrease in the growth rate means that workers will receive lower salaries, resulting in lower productivity. If budget deficits are decreasing private investment, America's economy will weaken.

Greg argued that everyday we are increasing our national debt and that President Bush is running our country on budget deficit. This is dramatically increasing our nation's debt. Greg asserted that income tax is not enough to support our nation, considering we are the most powerful country in the world. Greg ended his speech by stating that the federal government needs to reduce their spending so there can be more private spending, which will strengthen America's economy.

Sebastian argued the opposing side in Tuesday's debate. Sebastian argued that, if measured correctly, the total budget will be in balance (214). Sebastian stated that if the United States wants to achieve a accurate evaluation of their economic stance, it is essential to make numerous modifications to data that is nationally published. If changes are made, and "strange games of accounting" (229) are overlooked, there will be no budget deficit or national debt. Instead, there will be a deficiency of individual wealth and public investment (229).

Sebastian informed us that miscalculations of budget deficits