In the 2016 budget, the US government collected 2.99 trillion dollars. With regards to its outlays, the government spent 3.54 trillion dollars. This represents a 3.3% deficit with regards to the collection. This paper reviews the budget in light of these figures with regards to the fiscal performance of the US in the year 2016.
The US budget exceeded its planning capacity with up to $552 billion. Compared to the rest of the deficits experienced over the past four years, which stood at 5.8% in previous years, 2016’s performance was 2.5 percentage points less than the average, representing an improved fiscal performance of the United States. Nevertheless, the budget deficit during the Obama administration was much larger than any deficits experienced over any other administration in history, which averaged at 3.1% (Hyndman, 2017).
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As a result, 2016 budget deficits can be seen as an improvement, yet with the challenge of reducing budget spending in unnecessary areas in favor of efficiency in the federal government. The large sums of overhead spending represent the high administrative costs of the federal government in comparison to its revenues, which is not healthy for the government. With spending being ever higher, strain on the economy is more likely to be experienced at higher levels in future. Compared to 2015 deficit, however, the budget deficit increased from $399 billion to $552 billion with a slight increase in revenues. Considering this, the spending habits of the United States government are not healthy as an increase in spending shows high administrative costs and perhaps taking up projects that, at the time, are not sustainable.
In conclusion, the performance of 2016, in terms of budget deficits, is healthy compared to point averages. Nevertheless, the increase in actual deficits is a worrying trend showing that there could be poor fiscal management within the government.
References
Hyndman, R. J. (2017). 2016 United States Budget . Retrieved from Office of Management and Budget, Council of Economic Advisors: http://federal-budget.insidegov.com/l/119/2016
