Question

In order to meet an increase in demand for services and benefits the Congress will do

the following in order to supplement its annual income from taxes.
deficit spending
eliminates costly programs
increases taxation percentages
Olowers the percentage of debt servicing

Answer 1

Congress has several options to address an increase in demand for services, including deficit spending, increasing taxes, eliminating programs, or reducing debt servicing. Deficit spending is often used to stimulate the economy but can be politically unpopular, and while tax cuts and program cuts can reduce deficits, they also come with negative political and economic repercussions.

Step-by-step explanation:

Congress is faced with different strategies to meet an increase in demand for services and benefits, one of which includes deficit spending. This term describes the government's action when it spends more money than it collects in taxes, leading to borrowing and an increase in national debt. Section 8 Clause 2 provides Congress the ability to borrow money, often used for national defense throughout history but more recently to address economic downturns. During such periods, additional government spending can stimulate the economy, although it tends to be unpopular among voters.

Another approach involves raising taxes or cutting spending. The options available include increasing taxation percentages, eliminating costly programs, or lowering the percentage of debt servicing which involves reducing interest payments on existing debt. However, balancing the budget through cuts alone would likely involve reducing mandatory spending programs such as Social Security and Medicare, which is politically challenging.

Conducting deficit spending can lead to long-term issues such as pulling resources away from domestic investment or rising interest rates. The increasing debt to GDP percentage could also cause financial and global market uncertainty. Conversely, the Tax Act has shown an intention to reduce spending for lower-income households and cut taxes for higher-income households, potentially decreasing the federal deficit.

Politicians frequently favor expansionary fiscal policies like tax cuts and spending increases and are more reluctant to implement tax increases and spending cuts even when the economy is thriving. While the strategies to manage deficit spending vary, it is crucial to understand their implications for economic health and governmental fiscal policy.

Answer 2

Deficit spending is a practice where the government spends more money than it collects in taxes. Congress may resort to deficit spending to meet an increase in demand for services and benefits. In addition to deficit spending, Congress may also consider other measures to supplement its income, such as increasing taxation percentages or eliminating costly programs.

Step-by-step explanation:

Deficit spending is a practice where the government spends more money than it collects in taxes. This is often done to meet an increase in demand for services and benefits. In order to supplement its annual income from taxes, Congress may resort to deficit spending, which involves borrowing money to pay for governmental programs and services. This can lead to an increase in the national debt. However, deficit spending can have both positive and negative effects on the economy, as it can stimulate economic growth but also contribute to inflation and increase the burden of debt.

In addition to deficit spending, Congress may also consider other measures to supplement its income, such as increasing taxation percentages or eliminating costly programs. These options can help generate more revenue for the government, but they can also have implications for taxpayers and the availability of certain programs and services.

Overall, the decision to engage in deficit spending or implement other measures to supplement income depends on various factors, including economic conditions, government priorities, and public opinion.