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Budget Puzzle- Economic Policy

by | May 25

Budget Puzzle- Economic Policy
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You will reduce the deficit by eliminating programs (to get a savings) or increasing taxes ( to bring in more revenue) in the amount of $1,345 by the year 2030. There are 9 categories from which you can extract a savings to reduce the deficit described below. Decide where the savings will come from to reduce the deficit then, answer the questions below. You will find the paper version of this activity listing each category with line item and figures here (Links to an external site.).
Eliminate Programs
1). Domestic Programs and Foreign Aid
2). Military
3). Healthcare
4). Social Security
Raise Taxes
5)Existing Taxes
6) Investment Taxes
7) Income and Employment Taxes
8) Tax Reforms
9) Other taxes
You have the option of calculating the figures manually or using the paper version provided above. You can use the electronic budget calculator. The link and instructions for the electronic calculator are provided below.
Use the Paper Version of the Budget Calculator
Use the paper version with line items to identify areas to create a savings by 2030. Only use the 2030 figures. You must try to eliminate $1345 billion buy 2030.
Use the Online Budget Calculator
This interactive calculator provides an opportunity for you to make the difficult decisions about what to cut in order to balance the budget and/or reduce the federal deficit.
Visit the following website and use the interactive calculator to “Fix the Budget”. http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html?_r=0 (Links to an external site.)Links to an external site.
I suggest that you paste the link into Firefox in order to have full functionality. Do not use Internet Explorer.You also need Flash to use this interactive calculator.
You select a category (listed below) by placing an “x” in the boxes that correspond with your choice.The graphic will do the calculations for you. Please remember your objective is to reach $1,345 by the year 2030.
What criteria did you use to decide which areas received the most or least amount of the budget? What is your rationale for your funding decisions?
What are some economic and political reasons why it is difficult to cut spending from the current high levels?
What are some economic and political reasons why it may be difficult to increase taxes to raise revenues?
How much of the budget deficit were you able to cut by 2030? If you were able to reach the 2030 figures what are the implications of your cuts economically and for you politically? If you were not able to reduce the budget deficit then, what are the implications of your decision economically and for you politically?
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