How would entitlement spending be funded if tax revenues just cove.pdf

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How would entitlement spending be funded if tax revenues just covered discretionary spending and there was a government bigger deficit? How would entitlement spending be funded if tax revenues just covered discretionary spending and there was a government bigger deficit? Solution Entitlement spending is a part of the mandatory spending which involves spending on basic welfare and safety of the country. It includes facilities like medical care, food, military, etc. On the other hand, discretionary spending is optional spending undertaken by the government for the better standard of living of the country. It generally requires parliament approval in the form of a bill. If tax revenues can be used only for discretionary spending and there is government deficit, the following sources of revenues maybe used for entitlement spending: 1. Revenue from fees and penalty 2. Revenue from various economic activities undertaken by the government e.g. operating railways in the country 3. Grants / donations received, if any. However, taxes are the main sources of revenue and not allowing them to used for entitlement spending may lead to further problems for the economy..

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