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In this article by Robert D. Reischauer on taxes and spending under Gramm-Rudman-Hollings, it talks about the challenges facing the government in the balanced budget and emergency deficit control Act (Gramm-Rudman-Hollings or GRH) (Reischauer 223). The budgets for the subsequent years have been facing deficits which led to the enactment of Congressional Budget and Impound Act of 1974 so as to strengthen GRH; and to avoid loopholes and conflicts between the Congress and executive. According to the author of this article, this forced the government to bring a balanced budget after a failure of GRH (Reischauer 224).
The author of the article has explained how the Tax Reform Act (TRA) of 1986 led to a large slug of deficit reduction from $20 billion to $16.3 billion. With the unimproved economic conditions, the president instructed that, a deficit reaffirmation Act that was to be instituted was to correct the anomaly. Tax regulations were tightened and all expenditures should be within fiscal year budget approved by the congress based on the revenue collected through taxation (Reischauer 225).
In this article, debts were to reduce significantly when the GRH legislations were instituted. The author of the article blames the government on poor budgeting, revenue collection and allocation. This is seen as the government failed to meet the citizens needs due to lack of money. Taxes were to be increased in order to get sufficient revenues to be spent and political interference on government was to end (Reischauer 226).
The author of the article explains how the citizens were suffering and they reacted due to the deteriorating infrastructure, education, homelessness, AIDS victims, environment and health insurance. The author of this article explains how a committee was formed to handle the issue of a continuous deficit budget (Reischauer 230). The monetary policy was reviewed so as to ensure there is enough money reserves and adequate money in supply in circulation. The committee worked on all the modalities until they ensure a surplus budget was attained (Reischauer 232).
On my own opinion, the taxes were to be increased for two years so as to collect enough revenues in order to settle the debts and to avoid deficit budget every fiscal year. The fiscal policy which deals with the government expenditure must address the issues the citizens had raise concerning their well being. Such expenditures are meant to stimulate the economy and to avoid budget restraint.