sarah asked in Social ScienceEconomics · 1 decade ago

what kind of changes in federal spending affect budget deficits?

1 Answer

  • Anonymous
    1 decade ago
    Favorite Answer

    Any increase in spending increases the deficit. Any reduction in taxes increases the deficit.

    All reductions in spending and all tax increases reduce the deficit.

    The only notes of caution are about taxes that are extreme enough to actually stop people from buying stuff you tax or to otherwise avoid the tax, and spending that actually creates govt profits, like park improvements.

    The worst deficits are the result of interest payments to private lenders.

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