ACC202 Assignments Week 4 - Discussion 2

According to data from US government (2018), over a period of 68 years (1950-2018), the budget has been at a deficit for 59 years compared to 9 years it has been in surplus. The 3 years with the highest deficit are 2009(-9.8%), 2010(-8.7%), 2011(-8.5%) and the year 2000(2.3%) had the highest surplus as expressed as a percentage of the GDP. Surpluses or deficits as a percentage of GDP is an indication of the country’s ability to pay back in the case of a deficit and to increase operations in the case of surplus.

From the US Government summary accounts, there is a significant increase in on-budget outlay amount in the year 2009 than in the year 2008 without a corresponding increase in on budget receipt amounts over the same period or in future. Since congress is in charge of creating the federal government’s budget, it means that they created an allocation for this spending and approved by the president.

The primary source of government receipts is taxes. Different types of taxes exist such as Individual income tax, Social security and Medicare tax and Corporate income tax. Other sources of government receipts include proceeds from government investments, proceeds from sale of government assets as well as incomes from government fees.

Government spending is through funding of state department, federal agencies and programs operations in line with the needs of the needs of the citizens. This includes both capital and operational expenditure of these organizations. Government funds are also spent abroad by contributing to international affairs as needed to maintain global peace and development. It is important that the administration operates efficiently and focuses on creating as much value for taxpayers for each taxpayer shilling and improve the standard of living for all.

Major discretionary budget eliminations refer to the funding amounts that may have reduced or have nil budgetary allocation for the coming year, programs that were provide for by Senate in the previous period but have been not achieved intended objectives and keep incurring expenses. The executive therefore nominates that these discretionary items funding amounts be adjusted to release funds for other programs and functions. Discretionary items are those funded through appropriation bills and can vary annually.

Government operations are based on the budget it generates. The budget should take into consideration the economic situation within the domain and internationally as well. Whenever the economy is thriving, then more social programs can be undertaken but when the economy is at a downturn, then more focus will be made on stimulating economic performance and job creation. The estimates for budgetary amounts for future revenues will influence the level of government involvement in stimulating economic fortunes during the downturn. If the government works with ill-advised estimates, then they risk investing large amounts in economic programs and packages that may not be recovered in future revenues. The consequence of a government incurring such heavy losses is that it becomes stripped-off of financial power to perform even the basic social functions such as healthcare.

Amadeo, Kimberly. “Is the U.S. Budget Deficit Really That Bad?” The Balance, The Balance, 11 July 2019, https://www.thebalance.com/us-deficit-by-year-3306306 .

United States, Congress. “Budget of the United States Government.” Budget of the United States Government. https://https://www.govinfo.gov/app/collection/budget Links to an external site..

United States, Congress. “Budget of the United States Government.” Budget of the United States Government, Major Savings and Reforms, 2018. https://www.govinfo.gov/content/pkg/BUDGET-2018-MSV/pdf/BUDGET-2018-MSV.pdf Links to an external site..

“Budget Process.” United States Senate Committee on Appropriations, US Senate, https://www.appropriations.senate.gov/about/budget-process Links to an external site..

“Discretionary Spending.” Wikipedia, Wikimedia Foundation, 10 Mar. 2019, https://en.wikipedia.org/wiki/Discretionary_spending Links to an external site..

“Where Does the Government Get the Money It Spends?” Mercatus Center, 19 Apr. 2018, https://www.mercatus.org/publication/government-spending-101/where-does-government-get-money-it-spends Links to an external site..