Closing the Federal Deficit Gap: You Make the Call! (Making the Case for Expenditure Cuts and/or Tax Increases)

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Authors

Martin, James
Ockree,Kanalis

Issue Date

2012-02-1

Type

Working paper

Language

en_US

Keywords

Budget deficits - United States , Debts, Public - United States , Government spending policy , Tax shifting - United States , Tax incidence - United States , Problems, exercises, etc. , Case study , Federal budget deficits

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Abstract

This case allows students to analyze and provide workable solutions for closing the United States Federal deficit for the fiscal year ended June 30, 2011. Estimated at $1.3 trillion, the 2011 deficit pushed the overall US federal debt total above $15 trillion, mobilizing Congress to raise the US debt ceiling multiple times and leading to a downgrade in US debt by Standard & Poors. The case is particularly timely given the upcoming 2012 national elections. With candidates reluctant to make tough decisions to raise taxes or eliminate popular spending programs, the case arms students with workable estimates of federal expenditures, separated into familiar categories. The case also identifies tax revenues by source and income level for individuals. The student then is left to decide ... which taxpayers will have to pay more and which federal expenditures will have to be reduced.

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Washburn University. School of Business

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