Deficits, Surpluses, and the National Debt Essay Example

from the market as interest rates rise. Finally, national debt and tax structure can influence income distribution.

The government's collection of taxes from high-income individuals and the subsequent allocation of such revenue to assist the poor is an act of income redistribution. This concept also holds true in reverse. In terms of reducing deficits and the debt, the 1990 Budget Enforcement Act featured a pay-as-you-go provision that played a significant role in accounting for the 1998 budget surplus and resulted in the individual income tax becoming more progressive. When considering reducing spending, entitlements are classified as mandatory spending, although Congress holds the power to revise them.