The Budget By Chaquille Evanson

Contents Economic Health Politics of Taxing and Spending The Machinery of Economic Policy Making The Budget

Economic Health The Deficit and health for the past thirty five years came from the goals of Democrats and Republicans. The Democrats wanted to use the 1999 surplus to add new programs that involved miscellaneous things. The Republicans wanted to give the surplus back to the public Both sides had got what they had wanted in the long run.

In the best times of the economy the political standpoint is very uncertain. When uncertainty comes more uncertainty comes. September 11 th and Expensive military actions and spending both had effects on the economy to head us into the depression. It’s affecting the older Americans because they now have to work longer for retirement and medical benefits. The Recession had came because of The banks investing in failing companies, borrowing from the Federal Reserve, and the collapse of the stock exchange.

Republicans tend to control Supply with inflation while, the Democrats control demand.

Monetarism Createdby the famous economist Milton Friedman, monetarism is exsistent when inflation occurs then there is too much money in the economy chasing after too few goods.

Keynesianism Derived from the work of the English economist John Maynard Keynes It holds the meaning that the fovernment spending should create the right level of demand it indicates the health of the economy by how much their income they save and spend. It holds the values of Liberals and Democrats.

Economic Planning Some view the free market as too undependable to ensure healthy economic activity. This theory basicly says that the government should plan parts of the United States economic activity when markets start to fail to account for the public good.

Machinery of Economic Policy Making Is conducted by several offices Congress which is the most important player, Congress approves all taxes and almost all expenditures. Council of Economic Advisors (CEA) which includes professional economist sympathetic to the presidents view of economics. Office of budget and Management (OMB) which is part of the Executive Office, the OMB prepares estimates spent by federal and department budgets. Secretary of the Treasury (The Fed) Members of the Fed are appointed by the president, confirmed by the Senate, and serve nonrenewable fourteen year terms.

The Budget A budget is a policy document that announces how much the government expects to collect in taxes, spend in revenues, and how much those expenditures will be allocated among various programs. There was no federal budget before 1921 and no overall presidential budget until the 1930’s.

The Congressional Budget Act of 1974 Established procedures that make sure the budget goes according to plan. The president submits the budget The House and Senate Budget commities study the budget after receiving analysis from (CBO) Each committee proposes a budget resolution that sets a total budget ceiling, Congress is expected to adopt these resolutions in order to guide budget debates Congress considers appropriation bills

Budgets have big changes that are not possible because they approximately have two thirds of the governments spending is tied up in entitlements Efforts have been made to reduce federal spending. The passage of the Gramm Rudman Balanced Budget Act of was the first to place a cap on spending. If the President and Congress disagreed on the total spending level, automatic across the board cuts would be made.

A second attempt was made with the Budget Enforcement Act of Congress voted a tax increase and the Budget Enforcement Act capped discretionary funding. If entitlement spending increased, either discretionary spending had to be cut or taxes had to be raised. Current tax policy reflects a blend of majoritarrian and interest group politics.