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The policy issues involving the U.S. budget basically involve whether the tax level should match the level of spending. At present, government spending has increased at the same time that government revenues have been reduced. A substantial deficit exists and the government must borrow money to meet its obligations. The loans to the government must be repaid with interest through future tax collections.
Government spending and tax collection in the U.S. is divided between the Federal, State and local governments. The combined spending amounts to slightly more than 30% of our economy, a rate which is much lower than most industrialized countries. As a percentage of the economy, the present U.S. budget deficit is not as great has it was in the 1980's, and is not excessive when compared to other industrialized countries.
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