Airline Economy Evaluation

Solution Preview

Running Head: US ECONOMY

US Economy and Airline Industry

Introduction
The budget deficit and surplus is the important concepts for an economy as it directly related to the growth of an economy. The surplus and deficit of the budget in a economy also affects to the government spending and the welfare of the society. It also affects the various industries in the economy. The current and past budget surplus and budget deficit have significant effect on the US economy and airline industry. The paper describes the impact of budget surpluses and deficits on the US economy and airline industry -
Budget Deficits & Surpluses and US Economy
The budget surplus and deficit are the two different terms for the economy. The budget surpluses can be described as the increase in the income over the expenditures, while budget deficit can be described as the higher amount of expenditures over the income of the government. The budget surplus in US was experienced during the year 1990 because of the lower interest rates, reduction in the defense spending, and strong US economy (Alesina, 2000). The political forces and administrative policies were also the reason for the budget surplus in the US economy. The budget surplus caused the following activities in the US economy -
• Increase in the spending off government as there were sufficient amount available for the government activities. The budget surplus caused an increase in the government spending for the infrastructure development, which enhanced the industrial activities in US. An increase in the industrial activities improved the increase in the economic growth and GDP of the economy. The budget surplus in US economy caused a increase in the government spending by 52 to 60 percents (Saxton, 1998).
• The budget surplus also caused a reduction in taxes, which increased the public welfare. The decrease in the ...