Budget Deficit During The Great Depression

A budget is a financial plan of revenues, expenses and future costs for a given period. It provides information and set goals on how much the government is allowed to spend in the future. The purpose of a budget is to project their spending for short-term and long-term goals because it manages revenues and expenditures. A balanced budget and surplus budget decrease interest rates because it helps the government improve and grow over a period of time. If budget deficits arise, it increases interest rates because the total amount of expenditures exceeds the total amount of revenues. While low interest rates encourage more economic activities, high interest rates slow the economy, which causes loans harder to borrow. From time to time, the Federal …show more content…
Before Franklin D. Roosevelt served as the 32nd president of the United States, the Great Depression affected the economy in a very bad way. The Great Depression begun with the stock market crash which caused people to lose their jobs and become beggars struggling for survival. According to Cary Nelson, “The result was drastically falling output and drastically rising unemployment; by 1932, U.S. manufacturing output had fallen to 54 percent of its 1929 level, and unemployment had risen to between 12 and 15 million workers, or 25-30 percent of the work force” (The Great Depression, n.d.). As Franklin D. Roosevelt takes office as president, he develops New Deal programs by creating employment opportunities, providing farm subsidies and other economic measures. The purpose of these programs is to establish economic stability by bringing people back into the workforce. President Franklin D. Roosevelt has made “a number of major changes in the structure of the American economy using increased government regulation and massive public-works projects” (The Great Depression, n.d.) to prevent economic stagnation. However, the budget deficit continues to rise due to high levels of government spending which becomes a …show more content…
There are many people throughout the United States suffering because they do not have enough benefits to support themselves and their families. However, wealthy people are able to live comfortably because they have everything they need. The purpose of public goods and services is to make sure everyone gets the help they need in order to live happily. It is understandable that most rich people started their own business to create the wealth they have today, but it is a very good deed to help people who are having a difficult time. Many Republicans argued that cutting taxes would increase savings because it gives people the opportunity to invest and open their own business to create new jobs, however this does not guarantee that job opportunities would be open for those who are jobless. Reagan also stated he wants to reduce domestic spending because it would ultimately led to bankruptcy, but I think that is not true. The budget deficit would continue to grow because the government need to be responsive to society about their