Budget Deficit

Money   Tree

Budget Deficit

What is budget deficit???
Let me explain to you all…  =)

A financial situation that occurs when an entity has more money going out than coming in as known as government spending more than income. Government budget deficit as known as negative balance. The term “Benefit Deficit” is most commonly used to refer to government spending rather than business or individual spending. When it refers to federal government spending, a budget deficit is also known as the “National Debts.” The Government budget balance, also commonly referred to as General government balance, Public budget balance, or Public fiscal balance, is the overall result of a country’s general government budget over the course of an accounting period, usually one year. It includes all government levels (from national to local) and public social security funds. The budget balance is the difference between government revenues and spending. 

How if government don’t control?

If government doesn’t control their spending, they keep using the money, they will over spend the money and they don’t have enough money to cover and use for the next few year.  For example, Japan is good at their yearly expenses and the country is able to avoid over spending. If government no ability to solve the problem, it is because of over spending, they need to borrow the money from either within their country or outside their country, this will cause country owe more money than the past. If government borrow money with others means that this is a debts or liability as known as “National debts”. If government doesn’t have money to pay, budget per year will deficit.

My Opinion

In my opinion, a government budget is a legal document that is often passed by the legislature, approve by the chief executive or president. For example, only certain types of revenue may be imposed and collected. Property tax is frequently the basis for municipal and county revenues, while sales tax and/or income tax are the basis for state revenues, and income tax and corporate tax are the basis for national revenues. Government should saving the cash at the bank or a safe to use it in the future and not to over spending and use in appropriate places. Revenue is one of the basic elements of any budget.

The other basic element of any budget is expenses. In the case of the government, revenues are derived primarily from taxes. Government expenses include spending on current goods and services, which economists call government consumption; government investment expenditures such as infrastructure investment or research expenditure; and transfer payments like unemployment or retirement benefits. Government should not spend the money in dinner or having party.

Budgets have an economic, political and technical basis. Unlike a pure economic budget, they are not entirely designed to allocate scarce resources for the best economic use. The technical element is the forecast of the likely levels of revenues and expenses. So government need to save more the money and not to spend more their money.

By Jun Liang, Loh.