Economics: Proposal To Cut The Budget Deficit

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by 4 billion.
Making all entitlements subject to income tax would reduce the deficit by
74 billion and shrink the economy by 24.66 billion. Basing Medicare
payments on cost of managed care plans would reduce the deficit by 70
billion, and shrink the economy by 23.33 billion. Converting Medicaid to a
block grant in states would reduce the deficit by 54 billion, yet decrease
the economy. These tax increases will reduce the deficit by 223 billion,
and through the net tax multiplier (mpc/1-mpc while mpc = .25) the economy
will shrink at around 70 billion.

My increased spending shall position the aggregate demand curve back to
its origional place then move it a tiny fraction to the right, as marginal
growth would be accomplished through this entire plan. Increasing defenses
3% in 2002 would increase the deficit by 44 billion, and expand the economy
58.66 billion. Increasing domestic discretionary spending would increase
the deficit by 9 billion, and expand the economy by 12 ...

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