A developed country is known by the growth and the level of its economy. Economy of the United States is the world's largest single national economy. The United States' nominal GDP was estimated to be $17.1 trillion in December 2013. Budget deficit affects the taxpayers to a great extent this is because government spending exceeds all the revenue. This forces United States government to increase taxes on the taxpayers. The deficit affects taxpayers forcing them to dig deep into their pockets to increase government revenue. This will, therefore, enable the government plan for its appropriated financial activities. The government will then meet the needs of all its citizens. Budget surplus is an advantage to the taxpayers since the government has excess of its budget (Fletcher 2009). It is likely to subsidize products and reduce taxes imposed to the taxpayers. Debts also affect taxpayers in United States of America by making the taxpayers pay more to so as to meet government’s debt.
The United States deficit, surplus and debt affect future social security and Medicare. Budget deficit means that the government spending exceeds the income available. Deficit affects social security by causing reduction of charitable funds that the government allocates to elderly, and the less fortunate in the society
Medicare users are affected by deficit because when it happens; there will be a shortage of the number of patients who will benefit from the plan. Most of the retired people may not get the usual services as before because the government is running at a deficit. When there is surplus in government budget, both the social security and the Medicare will receive good and quality services. Social security and Medicare will suffer a shortage of their privileges this is because the government will divert its revenue to paying her debt.
Surplus, deficit and debt affect unemployed individuals in the United States of America. When the government budget is operating at a deficit, it will, therefore, have to spend less because of its little income. This will mean that the unemployment rate will increase and they suffer shortly of funds from taxes. This is because the government will be forced to reduce its spending by laying down some of the employees. The same is also experienced when the government is in debt; it may also reduce wages so as to meet its debt. When there is surplus unemployment rate will reduce because, most of the people will be employed, and the wages rise (John 2009). They will then be in a position to pay taxes hence increase in government revenue.
Deficit affects the students of Phoenix University; this effect is experienced when students are applying for personal loans. Students may not access enough loans and, therefore, they may suffer difficulty in paying their fees. This is because the government will use most of its money to meet its budget. Students may also lack jobs just after graduating since the government may not have enough jobs. When there is a surplus it is a benefit to the same students because they will then enjoy all the privileges from the government. Phoenix university students may not access all services such as tuition from the government when it is operating in debt. It is because the government is fighting hard to settle its loans to reduce huge interests.
When the United States government is operating at a deficit or its spending is more than the income, it will not show a good reputation to other nations. This is because USA is a superpower country and it is in the frontline in terms of economic and financial sectors. Thus, it has set an example to many nations. Whenever there is a deficit in their budget, it will create a bad image on the international level. When it is operating at surplus it sets a good reputation because it envied by other nations because of the progress. Debt lowers the reputation of the country since it is seen as it cannot manage to look after its citizens and hence may be rated among the poor countries (Fletcher and John 2009).
When a country is operating at surplus, domestic automotive manufacturer will manufacture and exports many vehicles this is because production costs are relatively low. When it is operating at deficit exporter will reduce the number of vehicles manufactured and exported. This is because a country’s interest rates and production costs are high. Debt will also reduce exporter’s sales because the government will impose a lot of taxes to pay back its debt.
Deficit will affect Italian clothing company to minimize its imports. When it is operating at debt, it will experience same thing because most of the revenue will be used to pay the debt. When a country is operating at surplus, importer will have the favorable environment to import clothing products because the government has a lot of surplus revenue.
If United States is operating at surplus, this will increase the Gross Domestic product because the country has a lot of revenues than expenses. When there is deficit, GDP will decline because there are a lot of spending the governments is engaging in which exceed income (Hoover 2008). A similar thing is also experienced when the country is operating at debt GDP will decline since the government needs to settle her loan.
Friedman, Milton (2005). The Role of Monetary Policy. (13th Ed) Washington, M.E. Sharpe Publishers
Fletcher, J. Gordon (2009). The Keynesian Revolution And Its Critics: Issues of Theory and Policy for the Monetary Production Economics. (7th Ed) Cambridge,Routledge Publishers
Hoover, Kenneth R. (2008). Economics As Ideology. (5th Ed) New York, Kessinger Publishers