Respuesta :
As a possible approach to eliminating the government budget deficit, increasing taxes for everyone would be a Fiscal deficit Policy. There are two ways they can reduce the deficit: either by raising taxes and/or boosting economic activity to increase revenue or by reducing spending on government-run programs to reduce spending.
What happens if there is an increase in the budget deficit?
Theoretically, a rise in the fiscal deficit might stimulate a sluggish economy by increasing consumer spending and investment opportunities by giving people more money. However, long-term deficits may be harmful to stability and economic growth. Over the previous ten years, the United States has regularly had a deficit.
Promoting economic growth is one of the best strategies to lower the budget deficit as a percentage of GDP. The government will generate more tax income without raising taxes if the economy expands. People pay more VAT, businesses pay more corporation tax (a tax on profits), and employees pay more income tax when the economy grows.
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