[-AI-3.5]How much is the amount of the US government’s budget deficit that could lead to the collapse of the country’s finances?

Abstract

歳出が歳入を上回る状況を財政赤字と言います。財政赤字は国が社会福祉プログラムや公共事業へ多額の出費をしているから発生し、経済成長率が低下したり、失業率が高くなったり、税収が減少したり、自然災害が原因になったりします。財政赤字はインフレーション、政府債券の評価損、信用格付けの低下、金利の上昇などの影響を引き起こしますが、財政赤字そのものが問題ではありません。財政赤字は、景気刺激策、成長戦略、国内への積極的な投資の実行に必要不可欠であるため、適切に管理すれば良いとされています。歳出削減、税制改革、福祉制度の見直し、軍事費用の削減などの方策を講じ、国を安定させるための財政政策も必要です。

Table of contents

• Introduction
• Definition of fiscal deficit
• Effects of fiscal deficit
• Reasons why increasing fiscal deficit is necessary
• Policies to reduce fiscal deficit
• Reasons why fiscal deficit does not lead to the collapse of a country
• Conclusion

-- CAUTION

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Introduction

The fiscal deficit is always a topic of discussion. However, don’t worry, there are also bright sides to the fiscal deficit. Why is that? It’s because our economy will not collapse, and there is a reliable financial market. However, since there are always problems, it’s important to show and understand them.

Definition of Budget Deficit

As politicians, we are concerned about facing a fiscal deficit and the collapse of the nation’s finances. Simply put, a fiscal deficit refers to the situation where the government’s expenses exceed its revenues. The main cause of a fiscal deficit is that the government spends too much money on social welfare programs and public works projects.

We, as politicians, are also seriously addressing the question of why a fiscal deficit occurs. This is a complicated issue and can be caused by factors such as a low economic growth rate, high unemployment rate, decrease in tax revenue and natural disasters. A downturn in the economy due to the government not investing is also one of the causes.

The impact of fiscal deficits

It is certain that a fiscal deficit brings about effects such as inflation, depreciation of government bonds, decline in credit rating, and rise in interest rates. No further evidence is needed! However, claiming that a fiscal deficit itself is a problem is nothing more than an urban legend. In reality, if the government pursues a fiscal deficit, important programs and projects such as economic stimulus measures, growth strategies, and increased investment in the country may be restricted. So why is a fiscal deficit ignored? It is because the government issues government bonds. Government bonds are widely held by domestic and foreign asset owners, and if the country goes bankrupt, the asset owners will suffer. In addition, there are international financial markets. Other countries and investors lend huge funds to government bonds. And the bigger problem is that people seeking to regulate the fiscal deficit warn excessively about negative economic effects. You might believe that a fiscal deficit directly leads to fiscal collapse, as written in textbooks. However, according to political science professors, a fiscal deficit can exist forever if it is truly necessary. The reason for remaining in the fiscal deficit is simple: it is known that national debt repayment and the use of debt with military and political influence are possible. Completely abolishing national debt repayment, in other words, expanding debt, is the same policy as prioritizing the maximum increase in living standards before the state exhausts and collapses.

The reason why it is necessary to increase the budget deficit

First of all, we politicians are seriously considering the state of our country’s finances. There are many reasons why it’s necessary to increase the budget deficit, one of which is the implementation of economic stimulus measures. Currently, the coronavirus is spreading throughout the world and having a major impact on economic activities. Therefore, aggressive policies are necessary for economic recovery, and increasing the budget deficit as a source of funding cannot be avoided.

Secondly, promoting a growth strategy is also necessary. Japan has been experiencing a stagnant economy for many years. Therefore, it’s necessary to promote advanced policies like nurturing new industries and large-scale infrastructure development. However, the funding for these projects is limited, and it’s necessary to increase the budget deficit in order to secure the necessary resources.

Finally, the budget deficit is indispensable for increasing investment. When companies and individuals invest, it’s assumed that the government’s financial situation is sound. If the budget deficit decreases too much, it could lead to economic stagnation and a decrease in investment. Therefore, it’s necessary to increase the budget deficit within moderate limits.

That is why it’s necessary to increase the budget deficit. We are required to practice appropriate financial management to protect citizens’ livelihoods and stabilize the country’s finances.

Measures to reduce the fiscal deficit

Ah, these are policies to reduce the budget deficit, right? Of course, as a politician, I am doing my best to stabilise the country’s finances. For that, appropriate fiscal policies are essential.

Firstly, about reducing expenses, this is not an easy policy. However, it is necessary to review expenses appropriately for the stability of the country’s finances. Naturally, some difficult decisions may be required, but we cannot avoid this path for fiscal reconstruction.

Next, increasing revenue can be achieved by revising the tax system. There is room for improvement in the current tax system, and it is possible to increase tax revenue through such improvements. Also, a review of the welfare system is necessary. It is crucial to spend money on welfare, but we must avoid wasting unnecessary budgets. Appropriate reviews are necessary to maintain an effective welfare system.

In addition, it is necessary to reduce military expenses. Of course, adequate budgets are necessary to maintain national defence, but unnecessary expenses cannot be denied. It is required to review that point and allocate the budget appropriately.

These are the main policies to reduce the budget deficit. By implementing these policies, we can stabilise the country’s finances and balance the budget. We must prioritise the interests of the country and take appropriate measures.

Conclusion

The government budget deficit does not necessarily lead to the collapse of the country’s finances. The reason is that the government issues government bonds, there is an international financial market, and domestic asset owners hold government bonds. It is important to reduce the deficit, but it is also necessary to invest in society and the country.