Positive Effects of Balancing Government Budget Essay

Positive Effects of Balancing Government Budget - Essay Example This essay outlines the importance of maintaining a balanced government budget to the state of a national economy. Governments should balance their budget to ensure that it operates comfortably on its revenues, within its means. Government obtains revenue from three major sources. These are through direct taxes, borrowing, and printing money. When the government imposes taxes, funds from entrepreneurs, businessmen, personal incomes and capitalists are collected. These funds are channeled to the treasury, where politicians and policy makers control on how to spend in a given particular financial year. Balancing budget enables the government to set and make realist financial judgments, which are not at the expense of the taxpayers. The current global recession has drastically reduced the level of income both at individual and national levels, as a result of job losses and shrinking of major markets. Balancing government budget would be beneficial in a number of ways. It would enable the government to control and critically analyze its spending. This will enable it to prioritize on the most important sectors, for example health, education, housing, security and welfare of workers. This would cushion these key areas from incurring budgetary deficits during periods of financial crises. Balancing government budget just as in personal budgets encourages utilization of resources more wisely. The government owes the taxpayers an obligation to use their money on provision of certain goods and services.