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Economics: Proposal To Cut The Budget Deficit Beginning of Paper The federal budget is an explosive problem which if not acted upon soon, threatens to swallow the entire domestic income. I have placed together several decisions that create a minimal impact upon the economy, yet reduce the federal budget deficit by 2/3s. The aggregate demand cur .... Middle of Paper .... taken away from the people. Imposing the Ad Valorem tax on energy, increasing the average residential bills by $50 a year would reduce the deficit by 25 billion, and shrink the economy 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, .... 419 words | 2 pages Subscription Length Price Join 30 days membership (recurring) $19.95 90 days membership (recurring) $39.95 180 days membership (non-recurring) $69.95