10 Oct 2022


The Impact of Government Spending on the US Economy

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The economic status of the Unites States is always facing a threat from time to time. Being a sole driver of many other world economies, such unbecoming activities also threaten other economies. One such issue that is currently in question is the government spending. Alarms have been raised that the government’s expenditures have far surpassed the annual revenue which has resulted in a high federal debt (Pianin, 2017). Economic analysts fear that the increasing debt could be of great harm to the economy shortly and have therefore urged the government to reduce its spending. 

Key analysts argue that the Obama government reduction of taxes is one of the reasons that have increased the government’s debt (Bernstein, 2016). They say it has resulted in lower revenues that cannot sustain the government. Another set of analysts thinks that the solution is cutting government spending. They argue that the government is spending a lot on unnecessary activities (Light, 2017). Both claims are legit, and they stand their ground. However, cutting government expenditures seems to be the ultimate solution. Raising taxes only oppresses the middle-class people more and yet they are the people who need to provide for their families and cater for their needs too. Cutting government expenditures is thus the way to go as we realize the American dream. This includes spending by not only the federal government but also the state and local governments. 

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The federal government is responsible for conducting and running national affairs (Higgins, Young, & Levy, 2009). It is responsible for funding both the local and state governments. The state government runs and is in charge of schools, hospitals, infrastructure, and environment conservation. The local government is closer to the people, and it is concerned with things like building regulations, public health, waste disposal, local environment conservation, and local infrastructure. Each of this governments collects taxes from the people which are used to fund its projects and sustain it (Higgins, Young, & Levy, 2009). 

It is, therefore, quite paramount that government spending is much considered as it could cost the nation much in the future if not now. Increasing national debt is quite harmful, considering that other states will also be affected by it grossly. Lowering the expenditure to fit in the revenue scale is the way to do away with this potential economic disaster successfully. 


Bernstein, J. (2016). The pre-election state of the U.S. economy. The Washington Post . Retrieved 19 January 2017 from https://www.washingtonpost.com/posteverything/wp/2016/11/04/the-pre-election-state-of-the-u-s-economy/?utm_term=.210cc79d7e8b. 

Higgins, M. J; Young, A. T. & Levy. D. (2009). Federal, State, and local governments: evaluating their separate roles in the U.S. growth. Public Choice , 139 (3), 495-507. 

Light, L. (2017). Federal Watchdog: U.S. government spending “unsustainable”. CBS. Retrieved 19 January 2017 from http://www.cbsnews.com/news/gao-federal-spending-revenue-unsustainable/. 

Pianin, E. (2017). Budget Watchdog to Trump: Government Spending Is On an Unsustainable Path. The Fiscal Times . Retrieved 19 January 2017 from http://www.thefiscaltimes.com/2017/01/18/Budget-Watchdog-Reminds-Trump-Government-Spending-Unsustainable-Path. 

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