For those of you that have mastered your own budget and are ready to move onto bigger and better things, you may want to check out The National Budget Simulation
This simple simulation should give you a better feel of the trade-offs which policy makers need to make in creating federal budgets and dealing with deficits.
This simulation asks you to adjust spending and tax expenditures in the the 2006 budget proposed by the White House in order to achieve either a balanced budget or any other target deficit. In order to make the choices we face in the budget clearer, we assume that you make the adjustments all in one year.
According to the Congressional Budget Office, the 2006 fiscal deficit is projected to be $296 billion. This does not include the costs of the Iraq War, so in the simulation the deficit has been increased by $105 billion, the costs of the supplemental appropriations for Iraq and Afghanistan operation for fiscal 2005, for a total projected deficit of $401 billion. These costs and the associated deficits can be adjusted in the simulation based on your estimates of the likely continuing costs of the war or whether to scale back or end those operations.
The Simulation also allows you to adjust the costs of the 2001 and 2003 tax cuts, either cutting or cancelling them to raise revenue, or increasing them to create larger tax cuts. It also allows you to increase or decrease tax expenditures, also known as tax deductions, credits or “loopholes.”
There is both a long and short version – the short version gives basic categories such as military spending, education, medicare, etc. while the longer version gets more specific giving you the opportunity to adjust spending within each category.
If you decide to tackle this, make sure you have some time. It can be addicting as you try and balance everything out and you’ll find several hours have slipped by unnoticed.
My first attempt left a large surplus and I received the following comment:
You’ve cut so much that the federal budget now contains a substantial surplus. Many economists warn that this budget may help induce or prolong a recession, and ordinary citizens demand a refund. You might want to cut taxes or raise spending. $110B surplus.
I then went through without my own preferences and trying to balance each area thinking in terms of the people that support that particular area of the government. What I found is that it’s a good exercise in balancing a number of competing categories that may all have a worthwhile purpose, but not enough to go around.
On a smaller scale, that is often what you have to do in your own budget planning. I found it much easier to cut what I consider “waste” in the government than what might be considered “waste” in my own life.
Have fun – and let me know your results in attempting to balance the National Budget!