Considering monetary policy, federal and state tax cuts, and our war on terrorism, what options does our government have available to them to balance the federal budget.

Answer 1

To move from a deficit to a balanced budget, lawmakers must raise revenues and/or lower spending. Period.

Not only do taxes raise revenue, governments also collect money from fines, penalties, and user fees. (Although, by comparison, these are tiny). And governments spend on a whole lot of other things besides fighting terrorism. E.g., National Parks, farm subsidies, roads, medical care, tax administration, aid to the needy, etc.