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The Pros And Cons Of Running A Deficit

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Throughout this paper, we will confront the issue of if The Federal Government should never run a deficit along with if a law should be enacted to state this. Through this work we will be exploring what a deficit is, the positives and negatives as well as my overall opinion on the matter. Firstly, the concept of a federal government running a deficit this is the case when the government is over spending, exceeding its budget or what the it takes in through taxes, fines, penalties, extra over a given period of time. With all this extra money that is being spent the government has to be able to obtain it from somewhere. The government does this by selling bonds to willing buyers. Though this does not make economic sense running a deficit is not always a bad thing. In the case of a recession the deficit spending through the purchase of goods and services by the government can help the country out. This can help stop the countries spiral down, turning the country back around therefore stabilizing the economy. Through these types of situations many believe that running a deficit can be a very positive …show more content…

When the government over spends and starts having to pay interest the future availability of spending is reduced. Thus if the government did not need to go over budget and does it is the availability of future projects and services, this is not something the public would want. As well as if over spending is done before the country is beginning an economic downward spiral the government will have to raise taxes as well as reduce services causing even worse conditions and digging a deeper hole. Another negative that can come is a reduced investment in the country. With the country unable to provide to build utilities such as dams and power plans, investors will not be wanting to buy stocks in local companies and sell stocks in excising companies making is harder to pay off

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