Examples of structural deficit in the following topics:
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- The consequences of a budget deficit depend on the type of deficit .
- The structural deficit is the deficit that remains across the business cycle because the general level of government spending exceeds prevailing tax levels.
- Structural deficits are permanent, and occur when there is an underlying imbalance between revenues and expenses.
- Unlike the cyclical budget deficit, a structural deficit is the result of discretionary, not automatic, fiscal policy.
- Although both types of government budget deficits are typically expansionary during a recession, a structural deficit may not always be expansionary when the economy is at full employment.
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- Although the 1985 law only modestly affected the government farm-assistance structure, improving economic times helped keep the subsidy totals down.
- As federal budget deficits ballooned throughout the late 1980s, however, Congress continued to look for ways to cut federal spending.
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- The Bernanke Era has included challenges faced by the Federal Reserve such as the financial crisis, strengthening federal policy, and reducing the deficit.
- The primary structural changes include increases in the economic stability of developing nations and the diminished influence of monetary and fiscal policy.
- In 2010, Bernanke also expressed his views regarding deficit reduction and reforming Social Security/Medicare.
- He favored reducing the U.S. budget deficit.
- He stated that reforming Social Security and Medicare entitlement programs would help reduce the deficit.
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- Traditionally, countries that turned to the IMF had run into trouble because of large government budget deficits and excessive monetary growth -- in short, they were trying to consume more than they could afford based on their income from exports.
- Often, such problems arose not because of their overall economic management but because of narrower "structural" deficiencies in their economies.
- In addition, the United States pressed the IMF to require countries to adopt structural reforms.
- In some cases, the fund eased its demands for deficit reduction so that countries could increase spending on programs designed to alleviate poverty and protect the unemployed.
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- Balanced budgets, and the associated topic of budget deficits, are a contentious point within both academic economics and politics.
- There is neither a budget deficit nor a budget surplus; in other words, "the accounts balance. " More generally, it refers to a budget with no deficit, but possibly with a surplus.
- Balanced budgets, and the associated topic of budget deficits, are a contentious point within academic economics and within politics.
- In the US, every state other than Vermont has a version of a balanced budget amendment, which prohibits some deficits.
- During recessions governments should run deficits.
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- A positive balance is known as a trade surplus if it consists of exporting more than is imported; a negative balance is referred to as a trade deficit or, informally, a trade gap.
- If (T-G) is negative, we have a budget deficit.
- Assuming that the economy is at potential output (meaning Y is fixed), if the budget deficit increases and savings and investment remain the same, then net exports must fall, causing a trade deficit.
- Thus, budget deficits and trade deficits go hand-in-hand .
- The twin deficits hypothesis implies that as the budget deficit grows, net capital outflow from a country falls.
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- Deficit spending during times of recession widely seen as a beneficial policy that can mitigate the effects of an economic downturn.
- However, even Keynesians that support deficit spending during recessions advise that governments balance this deficit spending with surpluses during the eventual economic boom.
- This is known as a cyclically balanced budget; the government runs a deficit during recessions and lean years but a surplus during periods of significant growth.
- To offset the budgetary deficits and raise the necessary funds to pay down debt, governments will ultimately have to lower costs and raise taxes.
- Since Congress is responsible for making budgetary, spending and taxation decisions, and because these elected officials may be disinclined to do anything that would hurt their chances to be re-elected, taking the necessary steps to balance out the periods of deficit spending during economic boom is difficult.
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- Like the financial account, a deficit in the capital account means that money is flowing out of a country and the country is accumulating foreign assets.
- For example, if a domestic company acquires the rights to mineral resources in a foreign country, there is an outflow of money and the domestic country acquires an asset, creating a capital account deficit .
- For example, if the domestic country forgives a loan made to a foreign country, this transfer creates a deficit in the capital account.
- Thus, the balance of the capital account is calculated as the sum of the surpluses or deficits of net non-produced, non-financial assets, and net capital transfers.
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- At the end of the 20th century, a growing trade deficit contributed to American ambivalence about trade liberalization.
- An even bigger factor leading to the ballooning U.S. trade deficit, however, was a sharp rise in the value of the dollar.
- By 1987, the American trade deficit had swelled to $153,300 million.
- But the American trade deficit swelled again in the late 1990s.
- By 1997, the American trade deficit $110,000 million, and it was heading higher.
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- If the government had to run up a deficit to achieve this purpose, so be it, Keynes said.
- Deficits now seemed to be a permanent part of the fiscal scene.
- Deficits had emerged as a concern during the stagnant 1970s.
- By 1986, the deficit had swelled to $221,000 million, or more than 22 percent of total federal spending.
- Beginning in the late 1980s, reducing the deficit became the predominant goal of fiscal policy.