National Budget Simulation


Imagine that you are an Economic Advisor to the President and need to provide a plan for reducing the federal debt. Conflicting goals create a need for compromise and tradeoffs to create a national budget while trying to remain under deficit limits. Follow the steps below to complete the activity, then respond to the questions posed:

  • Follow this link to The Committee for a Responsible Federal Budget: Stabilize the Debt Simulation.
  • Carefully read the background information and instructions before beginning the simulation. Your goal is to stabilize the U.S. debt at 60% of GDP by 2018.
  • When cutting programs, keep in mind that program cuts could seriously affect citizens’ daily lives. While it is easy to quickly reach deficit limits by making extreme cuts or even eliminating entire programs, try to consider the real-life ramifications of such cuts. Make sure to click on each budget area to access more information about it in weighing your decisions.
  • You do not need to provide your personal information at the end of the simulation.

After you have completed the online simulation, answer the following: What were the major changes you made to the budget to reach the goal? Why did you choose those changes over others – what were the trade-offs involved? How will the changes you made affect different groups of citizens? Do you think these changes would be politically feasible? Respond to at least two of your classmates’ postings.



Required Resources


Mikesell, J. (2018). Fiscal administration: Analysis and applications for the public sector (10th ed.). Retrieved from

  • Chapter 3: Budget Structures and Institutions: Federal and State-Local
  • Chapter 4: Budget Methods and Practices
  • Chapter 5: Budget Classifications, Systems, and Reform: Trying to Make Better Choices
  • Chapter 6: Budget System Reforms: Trying to Make Better Choices

Web Page

Stabilize the debt: An online exercise in hard choices (Links to an external site.). (n.d.). Retrieved from
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Recommended Resources


Office of Management and Budget (Links to an external site.). (



Budget Analysis – Budget Cuts

In both good economic times and in bad, public managers will often need to review their budgets and suggest areas in which their budgets may be reduced. Read Question 1 at the end of Chapter 3 in your text and propose how you would approach reducing the School of Public Affairs at Enormous State University budget by 5%. Begin with the strategies offered in your text and try to find articles or information on how cutbacks are handled in your city or state. Respond to at least two of your classmates’ postings.



  1. The data in  the  following  table  present  revenues  and  expenditures  by  categorized  type  for  the  School  of  Public  Affairs  at  Enormous  State    As with most elite programs at state universities, the school has accepted missions of teaching, research,  and  service  to  the  university,  state,  and  nation.  The data include budgeted  and  actual  data  for  three  years  and  the  proposed  budget  for  fiscal  2014–2015.  Your  task  as  a  budget  analyst  is  to  learn  as  much  as  possible  about  the  operations  of  the  school  and  its  plans  for  the  budget  year  just  from  these data. In particular, you should look for trends, changes in shares and ratios, and the categories that are particularly important in driving the finances of the school. A few notes about the reported data: First, the state appropriates money to the university and then the central administration distributes that money to the various operations on campus. That is the source of the state appropriation number—it  has  been  assigned  to  the  school,  so  this  number  for  2014–2015  is  an  actual.  All  others  are  part  of  the  request.  Second,  the  central  administration  charges the school for the services that it provides (central library, computer net-works,  etc.).  This  charge  is  the  assessment  number  in  the  table.  It  is  based  on  school operations during the year, so it is an estimate and counts as a negative component in school revenue. Your answer to this exercise should include both your conclusions from your analysis and a list of questions that your analysis has led  you  to  have  for  the  person  who  prepared  the  2014–2015  budget.  Suppose  the central administration has asked for each school to reduce its spending by 5 percent. Where would you suggest that the school turn to make that reduction?”

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