Principles of Macroeconomics

Posted: October 17th, 2013









Principles of Macroeconomics






Principles of Macroeconomics

            The current budget process run by the federal government is failing in the meeting of its basic requirements. The process was implemented to provide a guide that shall enable the country determine its annual spending and form priorities on its spending. Instead of meeting these key competencies, it prevents cooperation among key stakeholders, stifles debates and breaks down from time to time. The process was created in 1974 and in its 30 years of service it has been abused by lawmakers who hope to exploit its flaws to enrich themselves. The process collapsed during the 2003 and 2004 fiscal year and many problems followed suit.

The current budget process’s problems include the lack of incentive between the Congress and the President to seek agreement. The Congress violates its internal agreements as a habit and they rarely agree with the President. These disagreements often occur even with the most important parts of the budget. This makes the negotiations on allocations for the different sectors a very involving and time consuming task. The budget process also fails to provide a way of appropriating the discretionary funds which are set at a third of the budget. This means that the President and the Congress have to wait for the next year to set the appropriations again once they are set for the year. This means that there is no room for revision (Henderson, 1995).

The budget process is also designed in a biased manner. This means that it always focuses on high spending and the creation of more avenues to collect tax. The annual budgeters only focus on short term and therefore the budget process in short term in nature too. The process is also highly complex. This means that it is subject to being abused by those who understand it and those who know its loopholes. The current budget process is too complicated to its main stakeholders who are the voters, journalists and even the policymakers themselves. This means that even the decisions made are dominated by those who understand the process (McCarthy, 1981).


Henderson, D. R. (January 01, 1995). THE REAL BUDGET PROBLEM – To truly cut federal spending, Congress must first end the perverse incentives built into the budget process. Fortune, 132, 7, 63.

McCarthy, R. F. (December 07, 1981). The De-Greening of America–The Federal Budget. Community Services Catalyst, 11, 4, 26-27.

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