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How Gross Domestic Product (GDP) and National income are Influenced by Government Spending

The U.S. Congress debates the new budget every fiscal year. Most Republicans want to reduce federal spending. Democrats do not want to reduce federal spending by as much as Republicans do. Choose a side. Should federal spending be drastically reduced? Indicate how Gross Domestic Product (GDP) and national income are influenced by government spending?

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The U.S. Congress debates the new budget every fiscal year. Most Republicans want to reduce federal spending. Democrats do not want to reduce federal spending by as much as Republicans do. Choose a side. Should federal spending be drastically reduced? Indicate how Gross Domestic Product (GDP) and national income are influenced by government spending?

The material here is endless. What I can do is give you the basics of both sides. You did not specify which side you're on. Remember too that income and GDP growth are similar measures. The only proviso is that growth has to be even to benefit all. If it is not, and is controlled by a few banks, then GDP growth might look good on paper, but benefit only a few.

Liberal increases in spending and its defense:
Obama's basic approach:
Health care costs can be cut by raising taxes on the wealthiest retirees. Money to be spent to lower prescription medication prices.

$200 billion over the next few years in job creation. Liberals in the House want to go further, and spend as much as $4.2 trillion over the next 10 years.
Removal of any tax loopholes that corporations use. Tax firms heavily if they go overseas (I guarantee you that most republicans would back that).
Higher taxes on the top 2% of income earners by greatly limiting tax deductions.

Liberals in general want an increase of spending on education roughly about $25 billion over the next 10 years, at least according to the House Progressive Caucus.
Some of this will be paid for by ending the wars overseas. They want to reduce defense spending by about $800 billion over 10 years. Partly by changing the nature of the force in general (strictly mobile and defensive) and cutting back on nuclear and some high-tech weaponry.
Of course, both Obama and Congressional Liberals want Medicaid expanded.
In total, House Liberals want an increase of $4 trillion in social spending over the next 10 years.

Where is the money coming from?
Tax increases on the wealthy.
Massive investment in work programs to increase employment and thus, tax collection.
Middle class tax relief to get them spending again, this includes all kinds of ...

Solution Summary

The solution discusses how gross domestic product and national income are influenced by government spending.

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