There are no tax increases because the federal government spends more than it receives.
A budget deficit occurs when the federal government spends more money than it collects in taxes in a given year. conversely, if the government receives more taxes than it spends each year, it creates a budget surplus.
The two leading causes of budget deficits are excessive government spending and low tax rates that do not cover spending. tax cuts can reduce revenue and create budget deficits. also, a significant fiscal stimulus could push government spending higher than revenue.
Government spending increases aggregate demand, leading to higher prices. according to the law of supply, higher prices stimulate more production. as a result, more jobs will be created. increased demand leads to lower unemployment and higher production.
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