An annually balanced government budget is a difficult policy goal to achieve because

Question

Quizplus · Accepted Answer

All of the above are reasons why achieving an annually balanced government budget is difficult. A significant portion of the government's budget, such as entitlement programs and interest payments on the national debt, is beyond the short-term discretion of the federal government. Government also has little control over interest-rate charges on its debt during a fiscal year. Tax revenues automatically rise during economic booms and fall during recessions, making it challenging to predict and balance the budget. Additionally, transfer payments, such as unemployment benefits or welfare, rise during recessions and fall during economic booms, adding to the difficulty of achieving a balanced budget.

An Annually Balanced Government Budget Is a Difficult Policy Goal