Government Spending in the Last Ten Years, Essay

Government Spending

In the last ten years, the increasing levels of the national debt have become a major area of concern. This is because there has been an increase in this amount of over 200% from 2000 to 2010. As, this number went from: $5.67 trillion in 2000 to $13.56 trillion in 2010. This is troubling, because if these kinds of increases continue in the future there will more than likely be higher interest rates and some kind of economic implosion. To prevent this requires looking at: how the tax code can be reformed, the impact of the financial crisis on government revenues / expenses, discussing the best proposal to save Social Security and describing how Medicare would be changed. Together, these different elements will offer the greatest insights as to how the federal government should be dealing with these issues. ("Historical Debt Outstanding," 2012) (Bivens, 2010)

Recommend changes to the American tax system that would have positive effects on the U.S. Economy. Explain your rationale.

The best way to change the American tax system is to use a combination of flat and national sales taxes to increase revenues. The way a flat tax would work is to place one single rate on all income that is received during the year (regardless of what is earned).This will increase economic growth and encourage savings. While a national sales tax will directly go after the amount of money that is spent to make a variety of purchases from consumers. If both of these rates are kept at low levels, this will provide the federal government with two different sources of revenues. The combination of these areas will increase the amounts that are earned in comparison to the current system that is being utilized. This is when everyone will begin to save and spend more intelligently. (Meehen, 2011)

Discuss how the financial crisis which began in 2008 affected government revenues and expenditures and the most likely impact on future taxpayers. Provide specific examples to support your reasoning.

The financial crisis is having a negative impact on government revenues. This is taking place through lower income levels reported in these areas because of the reduced amount of earnings for individuals and corporations. While the expenditures, have been steadily rising during this time. This is from government programs that are designed to help stimulate the economy due to: the implosion in real estate prices and slowdown in consumer spending. Recently, there has been an improvement in the revenues that the government is receiving. However, outlays are expected to continue increasing. The impact that this.....