When taxes are high, people’s spending power declines and, as a result, the demand and supply for goods decline. A budget surplus resulting from an unnecessary increase in taxes can do more harm to an economy than good. The family is able to save more in this budget. What are the merits and demerits of a surplus budget and a deficit budget? 2. The sheer size and persistence of the U.S. trade deficits and inflows of foreign capital since the 1980s are a legitimate cause for concern. Yes exports have nothing to do with the budget surplus, its about the difference between government spending and taxation. But if the government has debts to pay off. The first thing to bear in mind about a budget is that one person’s surplus is another person’s deficit; one group’s deficit is another group’s surplus. ... B. The huge U.S. economy will not be destabilized by an outflow of international capital as easily as, say, the comparatively tiny … And it's collecting more taxes than it needs. Whether a budget surplus is an advantage or a disadvantage depends on the circumstances. See this video for the arguments about the advantages and disadvantages of a budget deficit. A budget surplus might be used to make a purchase, pay off debt or save for the future. Advantages and disadvantages of a budget deficit (2019 update) Print page received wisdom that budget deficits are bad and surpluses are good, and this thinking now dominates policy. Advantages of a budget surplus. A surplus allows a government to repay some of their existing national debt; This might lead to a fall in bond yields which makes future government borrowing less expensive; A budget surplus gives a government scope for meeting a future crisis e.g. Advantages of a balanced budget amendment Over the past several decades, the federal government has tended to run a budget deficit. In this revision video we look at the main arguments for and against a government increasing the size of their budget or fiscal deficit. These problems are of four kinds. Budget Surplus. If the government has no debts to pay off. Then this places an unnecessary burden on the economy and slows down economic growth. Therefore, a surplus budget is the opposite of a deficit budget. Surplus means an excess of something. Disadvantages: ADVERTISEMENTS: 1. Budget becomes a failure in case of irregular income. The illiterate people are unable to know the techniques of budget as it is a written plan. Disadvantages of a Budget Surplus. In fact, it hasn't run a surplus since the Clinton administration: Your surplus might have occurred from inaccurate budget projections or temporary discounts that won’t last, or current expenses that will soon rise. Surplus budget: In this budget, the income is more than the expenditure. 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