Question

Loss of economic activity led to increased government boosting of the economy. This led us to have staggering deficits and public debt. A Deficits is a shortfall of revenue under payments and a surplus is an excess of revenue over payments. Both of these measures are flows meaning that they refer to revenues and pay nets over a said period of time usually a year. By law state and local governments are required to balance their budgets but the Federal Government is allowed to spend more or less than its revenue. There were bills passed in the congress mandating to balance the Federal Budget by a certain year but as the date approaches the congress scrapped those bills and continue to run a deficit.

What were those bills, and why they were passes and why they were nullified?

Answer 1

The U.S. federal government has experienced budget deficits and surpluses historically. Legislative attempts, such as the Gramm-Rudman-Hollings Balanced Budget Act, have been made to balance the budget, but have often been reversed due to economic realities such as recessions.

Step-by-step explanation:

Historically, the U.S. federal government has at times run on budget deficits, which means it spent more than it collected in taxes. On occasions when the government collects more in taxes than it spends, we have a budget surplus.

There have been legislative attempts to mandate a balanced budget; one example is the Balanced Budget Act. However, these mandates are often repealed or altered due to geopolitical events, economic downturns such as the 2007-2009 recession, or other pressing needs that require government deficit spending.

During the Great Recession, the government implemented stimulus packages and safety-net expenditures that significantly increased spending resulting in record deficits. Similar circumstances were seen in 2020 when the U.S. government spent a historic $3.1 trillion more than it received in revenue.

Various factors, including economic recessions and policy decisions, have led to a national debt which is the accumulation of annual budget deficits and surpluses over time.

Concerning the exact bills that were passed and later nullified regarding the requirement for a balanced federal budget, such bills have been introduced over the years, including in the 1980s and 90s, but have been set aside due to various economic and political pressures.

A prominent example is the Gramm-Rudman-Hollings Balanced Budget Act of 1985, which set deficit targets to lead to a balanced budget. However, such targets were often missed and ultimately revised or abandoned altogether.