) Each year since winning control of the House of Representatives in the 2010 election, Conservative wing of Republicans have argued that we need to immediately initiate sharp reductions in government spending and entitlement programs and rapidly move towards a balanced budget, (although they have never actually produced a budget proposal in which tax revenues would match government spending plus entitlement transfers). Many Democrats, while arguing that tax rate increases on high income earners need to be part of the any deficit reduction program, have agreed that we need to initiate budget deficit reduction now. However, under the current Pandemic Crisis with $1.9 Trillion stimulus programs under Biden Administration (the third stimulus package since March 2020 and about $500 billion additional subsidy to affected small business owners. The Office of the Management and Budget (OMB) estimated that the federal government would raise an estimated $2.5 trillion and spend $5 trillion in 2018 and more in 2019. Another estimate by independent research organizations and government agencies predict that the federal budget deficit might increase by $2 trillion in 2021-2022 budget year. Adding the burden of stimulus package $1.9 trillion in in the process of disbursement, would result which of the following outcomes?

7A) What is the argument against attempting to balance the Federal Government budget rapidly at the present time via either deep cuts in Federal Government spending or sharp increases in federal income tax rates?

7b) Does this argument imply that skyrocketing budget deficits don't matter in the long run? If not, why might the impact of large deficits predicted in the long run under current tax and spending programs be different than the impact today? Explain