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Statement of Issue


The Federal Budget is the government's annual plan for spending tax revenues. The amount of total tax revenue, total spending and the difference between them are outlined in the U.S. Federal Budget.

  • The distribution of the tax burden between individuals and businesses matters! Every dollar of tax paid by the individual or the business means a dollar less of income for personal spending. The Federal Budget outlines the amount of tax money to be spent on various programs and agencies of the government.

  • The distribution of tax money among programs and agencies matters! The distribution determines our national priorities. Spending more on one program means less money is available for other programs. It also means that some citizens receive services while other citizens receive less or none at all.

  • The difference between tax revenue and spending matters! The Federal Budget has been in deficit since 2002 because the government has consistently spent more money than it has received in tax revenue. Overspending is the primary cause of a growing National Debt, that is, borrowing money from the public (loans).

  • Government borrowing money matters! Borrowed money must be repaid. Borrowed money requires regular payment of interest by the government. Tax dollars spent paying National Debt interest cannot be used for other important programs. Government borrowing also competes with business borrowing for capital investment. When businesses cannot borrow at a reasonable interest rate, firms do not expand or employ more workers from the community. In the long run government borrowing can impact the speed at which the economy grows as well as the general prosperity of the nation. In the long run the US would be seriously harmed if creditors chose to demand repayment or if creditors chose not to provide further loans.

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