2. Explain the difference between the debt and the deficit.  What are the good and bad points of the government borrowing money?

3. What is the difference between tax loopholes and tax expenditures?  Do you agree or disagree with the government allowing the tax expenditure examples cited?

4. How do the taxes and expenditures of the U.S. government compare with other democracies?  Why is this so?

Part 2- 5 points
5. What is the difference between tax reduction and tax reform?  What are the problems for each?

6.  Which is fairer- that all citizens pay the same percentage of their income in tax or that richer people pay higher percentages?  Is one of these better for the country?  Justify your answer.

7. Why has government grown so rapidly in western democracies?  What is your predictioon if this trend continues?

8. How did the social security system get so huge?  What is the long term problem with this system?  How can we fix it?

Part 3
 9.  What is the difference between incrementalism and uncontrollable expenditures?  Are they really uncontrollable?  Why are these considered problems?  Suggest how they can be solved.

10.  Describe the point of view of each of the major players in the budget game (besides Congress).  What does each one want?

11. What were the major budget reforms of 1974?  How successful were they?  Any suggestions of your own?

12. Bottom Line- Why does your text think that an unbalanced budget is inevitable?  What do you think?