This blog is for students in Ms. Aby-Keirstead's AP US Government class in Bloomington, MN. It is for students to post their thoughts on current events and governmental affairs. Students should be respectful & think of this forum as an extension of their classroom. The instructor has the same expectations for classroom discussion & blog posts. These posts will be graded for both their academic merit & for their appropriateness.
Respond to someone you have NOT responded to this term or last term. Interact with someone new! Be sure to use evidence to support your argument and to be clear what you are agreeing or disagreeing with and why.
posted by maby-keirstead @ 9:37 AM
This blog is for students in Ms. Aby-Keirstead's AP US Government class in Bloomington, MN. It is for students to post their thoughts on current events and governmental affairs. Students should be respectful & think of this forum as an extension of their classroom. The instructor has the same expectations for classroom discussion & blog posts. These posts will be graded for both their academic merit & for their appropriateness.
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Response to Post #7
Well hello bmac! :) Aren’t you ecstatic you’re the first to be (somewhat and in a friendly way) criticized?
Looking at your point of view, I’d have to say I do disagree with a few things. Still, I love your point of view, and actually enjoyed reading the blog posts.
Unlike you, I believe that the national deficit is not a big problem. Of course it isn’t the smallest problem we have in the United States of America, yet I wouldn’t call it big. I think for me, the deficit is just there. I believe this to be the case because deficit is measured in years, and debt is measured as compounded deficit and surplus of our economy. Deficit makes up a slice of the pie of the debt pie(4). Since Ms. Aby posted about the deficit, my response was different than to what it would have been about the debt. No one is huge fan of debt, and debt is a growing concern. I feel also, that it is less of a concern because deficit is much easier to adjust than debt. A little habit is much easier to change than an elephantine one. Speaking of habits, you stated that “This problem will only get harder to fix, the longer we wait.” Thinking on this topic, my decision is to agree with you. At first I felt that since the new fiscal year started on October 1st, a new cycle would start over again and since the United States was starting afresh, it would be much easier to start over. After thinking about it, the phrase “Old habits die hard” seemed to fill my thoughts on the deficit. If we never get surpluses, obviously I would agree, bmac, that the deficit is an enormous problem. Still, looking back at a chart on deficit and surpluses for the United States, we have gotten surpluses with the Clinton administration and even with the Nixon administration (1). It is possible to break our habits. That is an awesome thing because there can still be a free flow of money in the global market as well as the United States market. I feel that you were using a hyperbole when you said “If the United States fails financially, then the whole world fails.”
Before reading your middle paragraph, I had not known that you were fiscally conservative. From my understanding, the views that you presented are conservative on this pecuniary topic. I agree with you that cutting governmental programs to reduce taxes will help boost the economy. I also am in friendly agreement when you state that lowering taxes will also increase job opportunities. My democratic counterparts might argue that the trickle-down system doesn’t work, but obviously the rich do influence much of our economy. It is said that giving the rich more money means they will take that money and pump it into our economy. There is also an argument against this. Many believe that the rich just keep much of their money and do not bring the money back into the economy (2). Others say that the rich spend much lower proportions of their income (3). I believe this to be true, but we must also realize how much money a rich person may have.
As for the national concern on the federal deficit and debt, I wish to put much hope in your answer. Hopefully, government officials will put this issue on their list of concerns. Maybe not top concerns, but a problem is still a problem nonetheless, and it would be very good if we could solve our recent amounting deficits and debts.
1.)http://www.scribd.com/doc/3015540/US-Budget-Deficit-or-Surplus-1960present
2.)http://firedoglake.com/2010/12/12/the-trickle-down-theory-of-stimulus/
3.)http://www.csmonitor.com/Business/Robert-Reich-s-Blog/2010/1213/How-Obama-s-tax-deal-reinforces-Republicans-trickle-down-worldview
4.)http://www.treasurydirect.gov/news/pressroom/pressroom_bpd08052004.htm
Response to eSass:
Your point of view is one that I’ve seen many times and I really would like to agree with it, but there’s a part of me that just can’t. I’d love to see tax increases as the thing to do at all times, but I must admit that there are times when it’d be more beneficial to let taxes stay down, and recessions are one of those times for sure, in my opinion. The way I see it, people are suffering right now as a result of the recession (see, for example, the 9.8% unemployment rate (1)), and I’d rather see the nation attack the problems it faces as they come and thus mitigate those problems and their effects.
Your example of FDR and his effects on the debt with the recovery from the is solid in theory, but I would argue that that was such an extraordinary time, in conjunction with the very extraordinary circumstances involved. I would also argue such circumstances are not in play today. I do agree with your statement that “our country needs to do more to create jobs and get people buying things again.” That said, I don’t think that increasing taxes in such a way to attack the deficit/debt would help us do that necessarily.
All of that being said, your post is well written and I understand your points even if I don’t necessarily agree. Good job!
1. http://www.bls.gov/cps/
First of all, I would like to applaud Lexi for being progressive in posting her blog. Unlike the rest of us, she managed to get it done in the waning days of 2010!
Now onto my response to RJ:
First of all, I have not taken AP Econ so all that lingo is, for the most part, lost on me. Aside from that, I do have a few words to say about your post. While I agree that the rising federal deficit is important, I disagree with your theories for how to fix it. While I agree that it certainly makes sense that we should wait until the recession is over to further any serious attempts to lighten the deficit and then make serious cuts, I disagree with the ways that you propose to do so.
You said you believed that we should cut on defense and high income taxes for the wealthy. While these are reasonable cuts, I would say they are only reasonable in moderation. I can’t much argue with your taxing the wealthy because it does make sense that those were make more should be taxed more, whether they like it or not. Regardless, I see defense cuts in another light. You stated that the defense budget for the fiscal year of 2010 was $663.8 billion, further stating that that was a ridiculously high number. Reading this, I was interested to see what other information that the source that you got that number from had. I found as I read through the proposal, that some requested funds, such as those supporting military families, were previously in supplemental programs (1). The defense budget for 2010, although large, encompassed a broad range of particulars- some that had not previously been included in it in prior years. Seeing as the help to military families comes from the government, I would guess many liberals would be unhappy to see that part of the budget cut. As for the defense budget as a whole, I do think it is important. Although the Cold War years are over and people are recovering from the initial surprise of 9/11, I think it is always important to be prepared.
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If the defense budget were to be cut, it should be cut in moderation and other programs should be looked at to cut in moderation as well, those programs being social in nature. Social programs, though they are beneficial to many, take a huge amount of money out of the federal budget. As of 2010, the Department of Health and Human Services was $8.5 trillion in debt (2). This was by far the agency that was the most in debt of all the agencies mentioned on the webpage. If the United States truly wants to lower its deficit, I believe that we can’t depend solely on tax dollars of the wealthy and cuts from one executive department. Cuts in social programs will have to happen as well. I’m not proposing excessive cuts in these programs, because many Americans depend on them, but moderate ones. After all, the United States isn’t a socialist country, and therefore we can’t depend on everything coming from the government.
Your view on whether or not the government will work to control the government was one that I shared completely until I read an article for my blog post, leading me to change my mind. You said that the government is very unlikely to try to make any progress. It is clear from the article I read, that the deficit is a major concern of the federal government and something they will like to work towards lowering. A quote, taken directly from this article and which I used in my blog post is from Senate Minority Leader, Mitch McConnell: “I think the message to us, coming out of this deficit reduction report is that it's time for the president… and people like John Boehner and myself and others to… talk about what we can do to make sure that we have the same kind of country for our children and our grandchildren that our parents left for us” (3). I think the federal government will at least try to make reductions in the deficit. Though their attempts may very well come to a stand still when the 112th Congress begins its session tomorrow when the Republicans take control of the House.
(1) http://www.defense.gov/releases/release.aspx?releaseid=12652
(2) http://www.federalbudget.com/
(3) http://www.politicsdaily.com/2010/12/05/obama-needs-to-call-summit-on-the-deficit-top-democrat-says/
My dearest Bmac:
Now that I am copying and pasting my response from Word, I discover that Lexi has already responded to you. It's a good thing. You are getting people sharing their ideas on the deficit which is the point of this post so well done. In the words of Katie Carr "Snaps for Bridget". :D
I agree with you that the national deficit is a major concern, and that America has an unhealthy spending habit. However, I think we should wait until we get completely out of the recession to deal with it. We can only truly focus on the deficit during good economic years, and even though the economy is doing better, it isn’t the time to raise taxes or do anything that could cause potentially harm it again. Through research I found that “cutting programs can be politically risky, especially with an economy that's fragile and vulnerable to a pullback in government spending” (2). We should wait until the economy is fully stabilized. President Obama agrees that the deficit shouldn’t be first priority right now. He said the most frustrating part of his presidency is that he had to keep spending money and adding to the deficit in his first six months in office to save the economy. He has from the start called deficit reduction a goal, but one that had to get bumped in favor of sparking the economy (1).
I agree that decreasing the size of government is a good way to cut spending. More job opportunities and lowering taxes would be very good for getting the economy back on track, and then later on working on the deficit. I also agree that fixing government expenditures like healthcare would benefit also. Overall, to bring the budget closer to balance, Congress will have to raise taxes, cut spending, or both (2). Obviously none of those ways are popular; therefore I agree that government officials will “give fixing the budget a prominent role in the next few year’s agenda”(3). They will try and find ways that are more popular to fix this crisis. I think you did an awesome job on this post, even though I may respectfully disagree with you a little bit. You had good informative sources to back you up as well. Keep up the good work :D
1.http://news.yahoo.com/s/ap/20101024/ap_on_go_pr_wh/us_obama_how_will_he_govern
2.http://www.csmonitor.com/Commentary/David-R.-Francis/2010/0809/How-to-fix-the-deficit-Tax-and-cut
3.Bridget’s post
Because I THOUGHT THIS WAS AMERICA, I am going to respond to AnthoNOVA with pointless political bickering riddled with non sequitirs and pathetic attempts at humor. Let's get this over with.
Anthony, I'd just like to start out by saying that you are just plain wrong. This blog post clearly references the budget, or else Ms. Aby would not have included the phrase "budget hawks" in the introduction to Post Seven. Duh. Now on to the actual topic of the deficit, I'd like to state first that OBummer and the Dumbocrats ought to be impeached for running up such a large budget deficit! What does he think the federal government is, the only branch of government allowed to borrow money?
Also, I have to agree with you that President Obummer is the worst president in the history of the United States because our risk to see a downgraded credit rating due to our massive national debt (1), every cent of which is obviously Obummer's fault. I need to strongly disagree with you that the end is not nigh, as having a president like Obummer with the impending date of December 21 2012 means doom and gloom for us all!
To sum this all up, Obummer is a terrible president because he fails to provide us with low taxes, lots of benefits, and no budget deficit! Vote him out in 2012, Sarah Palin will make sure you pay no taxes, receive mucho benefits, and there will be no national debt or budget deficit (actually, I can't back up that claim, I just made it up) (2).
Also, our economy is not in the shape to be raising taxes, we need to CUT SPENDING! Tell those lazy slobs on Medicare and Social Security to start pulling their weight and get back to work! We have two illegitimate wars and a world to police through CIA clandestine operations (3), it is high time we start slashing entitlement spending and tell those social welfare slobs to get jobs! That will make the deficit go away like *poof!*
Sources
(1) http://www.telegraph.co.uk/finance/economics/7153180/US-credit-rating-at-risk-Moodys-warns.html
(2) my imagination
(3) https://www.cia.gov/offices-of-cia/clandestine-service/our-mission.html
In response to Val:
Great blog post! I would have to agree with you on how if the United States government only focuses on trying to fix the deficit that that would not help the economy at all since, from the research I have done on my own—since I am not an econ yet—I have noticed that many people say that by making the budget deficit larger would actually help the U.S. economy. I also liked how you put in the poll that shows that 69% of Americans are in support of President Obama’s tax cut deals, while only a mere 29% are opposed (1). This clearly shows that the majority of the United States population is in favor to cutting programs if that means that it would help the economy.
I would also have to agree that balancing the budget would nearly be impossible since they would have to make cuts to defense, Social Security, Medicare, and debt payments. However, in my own research I found that radical budget cuts do indeed help the economy sooner or later. As I stated in my previous blog post about the 1990 Canadian massive budget cuts, they were able to get their economy back on track (2). But, like what you said Val, I don’t think that would be the best to do right now. They should really just wait this out because deficits happen all the time. But I liked your idea on how they should bring back the Bush tax cuts, especially how you stated the evidence on how it help the wealthy as well as everyone else back when Coolidge, Kennedy, Reagan, and Bush were President.
1. ttp://www.examiner.com/political-buzz-in-national/polls-on-tax-cut-deal-shows-americans-really-do-not-care-about-the-deficit
2. http://www.industryweek.com/articles/the_competitive_edge_the_federal_deficit_comes_into_focus_23444.aspx?Page=1&SectionID=3
In response to Abby R.:
I agree with that America faces tough choices on whether we should focus on trimming the deficit now or later. I think doing it either way is risky. For example Japan has faced major economic problems for from the middle 1990’s ‘til today. They have had this problem due to lackluster economic growth and crippling debt due to contentious stimulus spending (1). Many analysts believe that the United States could be heading for a “lost decade”, due to similarity between the policies enacted by the two governments. (1) The other option the United States has is to cut spending and or raise taxes now. This could kill the economic recovery and cause a double dip recession.
You suggest we find a comfortable in between for solving the budget crisis. I think the Deficit Commission’s recommendations is that in-between. None of commission’s proposals will begin for a couple of years allowing the economy to recover and it also begins the process of reducing the deficit. I agree Congress does not have much of a choice in cutting the deficit because if they continue to spend as they have been they will be voted out of office. The Social Security reforms proposed such as raising the retirement age would be an easy way to reduce entitlement spending.
Overall you did a great job of examining the responses the federal government can take to reduce the deficit and identifying the pros and cons of each option. You provided good analysis on Social Security.
(1) http://www.businessweek.com/news/2010-12-08/u-s-faces-lost-decade-on-recession-japan-s-sakakibara-says.html
Eric,
In addition to sharing a part of my name (sort of), you also share some of my views on budgeting and the deficit. First, let me say that, as someone who hasn’t taken economics, I am really impressed by all your technical mumbo-jumbo. Second, we also share the same favorite president, and I said a couple things about FDR in my blog post, which you most likely didn’t read.
I completely agree that simply “fixing” the budget doesn’t do us any good in fixing the economy, I agree that we have to have a stable economy before we can try to iron out the wrinkles. We live in a capitalist nation where spending means earning, and earning means spending, I agree that now is not the time to limit federal revenue, now is the time to make sure that people are spending. This means making sure people are earning. This means making sure people have jobs.
Free markets such as ours are believed to create “endless prosperity”. In this time of recession, it becomes obvious that this isn’t always the case (1). A free market is by definition unregulated, there is no way to completely control it, that means limited options for fixing it. What I agree with you on is that the government needs to try. The government cannot just sit by and talk about what needs to be done, they actually need to do something.
So, Eric, good info, good opinions, good post. Oh, and Happy New Year!
(1) http://www.nytimes.com/2010/12/05/weekinreview/05bai.html?ref=politics
eSass:
I understand your concern with the deficit and it is a scary thought that by 2025 the entire federal budget would be spent on debt interest and entitlements, but I don't agree with you that the federal deficit should be our number one concern considering the current economic climate the country is facing.
Recessions are the worst time to take actions to decrease the federal debt and deficit. With unemployment at high levels, increasing taxes will lead businesses to cut more workers, and cutting spending is not reasonable because the government needs to spend more to promote economic growth and help unemployed workers [1]. These contractionary policies generally have the effects of slowing economic growth, which is the last thing a country wants to do when it is recovering from a recession. You mentioned that you think the government needs to create more jobs and increase consumer confidence, and the only way that can happen is with cuts in taxing and increases in spending: if people pay less in taxes, their disposable income increases and they will spend more, and the government has to spend more money to create more jobs. While the interest on the debt is a burden, it isn't something that should be tackled right now because doing so is likely to slow economic growth.
Although it will increase the deficit, I think that extending the Bush-era tax cuts is the right thing for the country right now. They are only going to be extended for two years, and I think that will be long enough for the economy to be in a better position. At that point, I think tax increases to reduce the deficit would be reasonable, but not until then.
1)http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aNivTjr852TI
This comment has been removed by the author.
New year...new person to respond to.
In response to Savannah...
On Wednesday, Congress will resume and their top priority SHOULD be the budget deficit and the national debt. As you stated in your post a “recent NBC/Wall Street Journal poll they found that 70 percent of adults say they are uncomfortable with cuts to Medicare, Social Security, and defense programs, and a solid 59 percent of the adults surveyed rejected increasing taxes and eliminating popular deductions.” But just because the average American adult disagrees with cutting spending and raising taxes doesn’t mean that it won’t happen. In fact those are the only two ways to decrease the deficit. There is currently a $14.3 trillion federal debt ceiling, and since the current debt sits at $13.9 trillion dollars with an annual average growth of $4 trillion something will have to be done or else the government will be at a stand-still (1). Also you stated that the government thinks the “only way they can get out of this deficit is through slashing budgets to programs”. I disagree here as well because just a couple of weeks ago Congress passed and the President signed a stimulus package that was based on tax cuts to stimulate the economy and in turn reduce the deficit, not focused on cutting programs (2).
On the second segment of your post I half agree and half disagree with you. I think that budget cuts need to be made but I also think that increasing revenue through raising taxes is also important. Compromise would be great, but I think it probably won’t happen. Your example of Canada’s economy does support your idea of slashing back on government programs but you failed to mention how many people dislike Canadian healthcare and how inefficient it is. I’m also going to assume that Canada’s deficit was not as massive as our deficit currently is. Meaning that we would need a lot more cuts and adjustments than just slashing back healthcare, and civil service. I kind of agree with waiting until the recession is over to deal with the deficit but there are signs that say that we are beginning to move out of the recession now and it takes time to implement policy so I would argue it is time to act right now (3).
(1)http://thenewschronicle.com/budget-spending-agenda-congress-convenes-wednesday/0102010579/
(2)http://blogs.wsj.com/washwire/2011/01/02/goolsbee-obama-to-make-tough-choices-on-budget/
(3)http://online.wsj.com/article/SB10001424052748704
In response to David
I agree with David when he says that the government has an “addiction to spending”. The nation’s government needs to stop focusing on short term band aide solutions and began focusing on the long term fix. Also I agree that the U.S needs to get out of the war Iraq and Afghanistan. “The economic costs of the wars in Iraq and Afghanistan are estimated to total $1.6 trillion”[1]. This is money being spent that the U.S can no longer afford.
However, I disagree with David that what the country needs is to increase the budget as a first step. “Raising government revenue — taxes — substantially is not only bad policy; it has proven difficult and ultimately unsustainable for any length of time in the past 60 years.” [2] And continuing such a bad trend of policy will only maintain the downward spiral. Another thing I disagree about is the bush tax cuts. I believe if we let them expire then we will not allow the economy enough time to recover [3].
[1] http://www.breitbart.com/article.php?id=D8SSR4U80&show_article=1
[2] http://www.theoaklandpress.com/articles/2011/01/02/opinion/doc4d1bec43b2448933479866.txt
[3] http://blogs.forbes.com/brianwingfield/2010/09/09/the-effects-of-extending-the-bush-tax-cuts-for-two-years/
Response to EmmaBee,
I agree that the budget deficit is a serious problem for the United States. I think you are right that a solution needs to happen soon because it will just get worse and worse the more that we wait. I also agree that defense spending should be cut, however my guess is that ending wars and removing troops is more complicated than it sounds.
I do not agree with you completely on your taxing propositions. It is evident that most Americans are foolish and have conflicting interests, in that they want low taxes and many benefits from social programs. I think to fix the deficit some tax increases are inevitable. However, I don’t think they should only be raised on wealthy and middle-income families. Although it obviously makes sense that wealthy people pay more taxes than low-income people, I think that the tax rates are already too uneven. The rates are progressive as it is, and you are arguing for the higher-income people to pay even more. Many Americans don’t pay any income taxes at all. For example, in 2008 the bottom 50% of people paid only 2.7% of all federal personal income taxes. The top 5% paid 58.72%(1). If taxes are raised, I think that they should raise taxes for every bracket, if even just a little bit. After all, people with lower incomes receive most of the benefits from federal services(5).
I think that taxing soda is a good idea. As you said, it has no nutritional value so in addition to raising revenue it could also help to lower health care costs in the long run(2). That said, I don’t think that lowering the costs of healthy drinks would be a wise decision. Although I understand your reasoning, I think that it could make the tax on soda pointless. To reduce the cost of healthy drinks, they would have to subsidize them in some way, which costs money. The revenue from the soda tax would most likely be used up or substantially reduced. Also, while taxing soda seems reasonable to me, I’m not sure how much of an effect it would have on solving the deficit.
I also think that the Social Security and Medicare age should be raised. When Social Security was created people were more worn out at the age of 65 from labor and they didn’t live as long(3). Now, most Americans work in jobs that do not require physical labor and medical advances allow them to live much longer(3). It only makes sense that the age should be raised a couple of years.
Overall, I agree that taxes need to be raised to fix the deficit, but I think that to truly solve the deficit some federal services should be cut as well(4). You did mention cutting defense spending, but I believe that to tackle the deficit some social programs should be limited too. Although my knowledge about economics is limited, limiting spending while increasing revenue just seems to makes sense. Also, since there has been such a gridlock between the parties about how to fix the deficit, if both the parties have to give up something, maybe they will compromise. I admit that the possibility of compromise is rather unlikely, but who knows.
Nice work on your post! ☺
1. http://www.ntu.org/tax-basics/who-pays-income-taxes.html
2. http://economix.blogs.nytimes.com/2010/11/16/taxing-soda-to-close-the-deficit/
3. http://www.forbes.com/2010/05/03/deficit-fed-gdp-markets-louis-navellier.html
4. http://economix.blogs.nytimes.com/tag/budget-deficit/
5. http://www.taxfoundation.org/files/sr151.pdf
Hi Erika!
While reading your blog post I was intrigued by the fact that we had rather contrasting views on how to solve the United States’ deficit problem! You said that we should develop a strategy similar to the one Franklin D. Roosevelt created to get the country out of the Great Depression. This means that the scope of government would greatly increase and there would be an increase in government organizations and government aid. I did some research and found that decreasing government would be a better way to lower the deficit. By lowering the amount of government agencies, programs, aids, etc, we can decrease spending that is the cause of the deficit(1). This will also enable us to lower taxes. Yet another benefit to this strategy is that is it found to increase job opportunities(1). Also, simply developing a more efficient federal system will help to reduce the deficit(2).
I agree with you that forming a solution to our national deficit is crucial. I enjoyed reading your post, and I thought it was very well organized!
Sources:
(1)http://www.timesrecordnews.com/news/2010/dec/13/cutting-our-government-size-will-reduce-the/
(2)http://www.associatedcontent.com/article/6076358/seven_ways_to_reduce_the_federal_budget.html
In response to Emma Becker (wow, this may be the first time I have to split my blog into two comments! Hooray!):
Although I essentially agree with you, I think in your post you over-simplified the complicated economic situation that the U.S. is in and made arguments based on opinion rather than fact which ultimately weakens your points. Of course, raising taxes makes sense, but the complex reaction of what those tax increases would do is what the entire debate is about. Having said that, I do agree that the Bush tax cuts should not have been extended for the wealthy. Preserving tax cuts does not guarantee that the money not gathered by taxes will be spent and in turn revive our economy; much of the money could likely lay stagnant in the pockets of the wealthy, gaining interest and making the rich richer instead of stimulating the economy. I honestly think it is astounding that the Bush tax cuts were extended under Obama’s watch. When former President Bush entered office, the country’s debt stood at $5.727 trillion; when he left office, it had increased to more than $9.849 trillion (a 71.9% increase!)[1]. I would have thought that after this type of result, the tax cuts combined with our wars in the middle east were an obvious failure in terms of balancing the national budget. Perhaps the tax cuts were preserved in a compromise Obama “had” to make in order to extend unemployment benefits, but I remain skeptical and pessimistic until things play out in the coming years.
Also making statements like “the American people are stupid” will get you into trouble in civil discussion, no matter how much it may be true. You also said that the people need a politician “that has the guts to actually do whats best for the country, instead of what the people think they want.” Although this idea in theory makes sense, it’s simply never going to happen. First off, politicians are elected by the people, so they would never be able to reach office unless they offered ideas people are attracted to. I also believe most politicians are interested in satisfying their constituencies and being re-elected than truly doing what is right and following their personal beliefs. For example, Russ Feingold, a Senate democrat from Wisconsin, who many consider to be a passionate and driving force of the Democratic party, was unable to win his seat as a popular incumbent in the 2010 Mid-term elections. Somebody as popular and driven as Mr. Feingold who also happened to unwaveringly support his own beliefs wasn’t even re-elected; just a small example of a looming problem over our democracy that seemingly cannot be fixed.
Although your suggestions at a national sales tax on unhealthy drinks may be effective in combating obesity and our debt problem, I don’t think it’s major enough of a change that could help much. I do however agree with you that a change that should definitely occur is the extension of the social security age. When the age was set in 1935 at 65 years old [2], the average life expectancy in the U.S. was 59.2 years old (curious and surprising, I know) [3]. The most recent statistics from 2003 report that the average life expectancy in the U.S. had increased to 77.5 years old [3]. This change in life expectancy provides a startling discovery at a reason Social Security has become one of the biggest parts of the federal budget. Reform is now the obvious next step, but it remains to be seen if politicians will be able to change the sensitive program.
[1] http://www.cbsnews.com/8301-500803_162-4486228-500803.html
[2] http://www.ssa.gov/history/age65.html
[3] http://aging.senate.gov/crs/aging1.pdf
This is in response to J Sengly:
I agree with Justin on most of his points. First, the national deficit is a major concern and I definitely feel that it is something that politicians need to try to do something about. It is a greatly debated topic at the moment with every politician choosing a stance and sticking to it as though they were glued there. With hugtight glue. I agree that the national debt should definitely be high on the list of priorities for the federal government. The nation is getting close to the debt ceiling and there is talk of raising it (2). This might be necessary in the short-run because the debt is growing soooooo fast, the government should not just keep raising the ceiling (2). They need to figure out a way to stop the debt from growing so fast. And it is definitely growing pretty darn fast, I watched the debt clock for a couple minutes and it was frankly just upsetting (3). Like Justin says, the tax cuts are not helping the situation at all. When you are spending a lot of money but want to stop going so far into the red, the right solution is NOT avoiding $900 billion of potential revenue (4). It’s basic math, if you have a negative number and you add another negative number, the result is not equal to a positive number, it is equal to an even MORE negative number (1). The federal government needs to choose. They must cut taxes and cut spending OR leave spending and raise taxes. Or else they could do something in between there, but the point is that neither side ever wants to give in at all to the other, but if this continues the national debt will never improve. I agree with Justin that after these recent tax cut extensions it seem unlikely that a decreased national debt is in our nation’s near future, but there is always hope.
Good post Justin!
1. http://en.wikipedia.org/wiki/Negative_number#Addition (Ms. Aby, I know we’re not supposed to use Wikipedia, but it seems that in this case Wikipedia would probably be fairly accurate. I think that if they messed this one up they would get lots of people yelling at them. And no one wants that. So, based on that logic, this page seems accurate.) (Also, I read it and it is.)
2. http://www.npr.org/2011/01/02/132594987/obama-aide-dont-play-chicken-with-debt-ceiling
3. http://www.usdebtclock.org/
4. http://www.cnn.com/2010/POLITICS/12/17/tax.deal/index.html?iref=allsearch
In reply to Savannah
The opening of Savannah's post reads:"With the United States of America in a debt that is over 14 trillion dollars, the federal budget is and was a major concern for candidates who were newly elected into the Senate and House." While I don't disagree with Savannah's opinion that the deficit is a major political concern, I do disagree that it is disturbing simply because we are reaching another unthinkably large milestone on the debt clock. Since the debt began growing people have been sounding the alarm about its massive size: note this 1967 article which notes public and congressional resistance to increasing the debt ceiling to 365 billion (1). Most likely, the astronomical size of that number ("We owe a billion for every day of the year!") was a major concern for politicians that year, and the cause of much unrest when the bill to increase the debt finally passed. Nothing happened. I am not claiming that our debt does not have consequences nor that the debt is not concerning, but the mere fact that our debt is a 14 digit number means nothing by itself.
Savannah's discussion of possible fixes for the budget brought in the topic of massive Canadian budget cuts in the 1990s that saved its budget; I appreciated that example from recent history and had not heard of it before. I must entirely disagree, however, with this statement: "Washington has already taken steps to try to fix the budget by having the Senate approve the 858 billion dollar tax plan..."
Rather than forcing budget cutbacks and tax increases as the flawed conventional wisdom in my head says the divided government during the Clinton Administration did (3), I fear that the recent tax compromise demonstrates that Congress will not get serious about the deficit. The compromise does not try to fix the debt in the slightest. It is a double whammy of spending increases and tax decreases that, while consistent with theories of fiscal policy, increase the debt by $858 billion (2).
(1) http://news.google.com/newspapers?id=QksqAAAAIBAJ&sjid=pE8EAAAAIBAJ&pg=3822,3713399&dq=national+debt&hl=en
(2) http://www.google.com/hostednews/afp/article/ALeqM5jxh91eOpscz1rO5bP7w8B8EZoqyg?docId=CNG.6edc9720678bb34883c47ed5dc833d0c.441
(3)http://www.times-herald.com/opinion/op-ed/towery/Gridlock-you-can-believe-in-1425399
In response to Erika:
I agree with Erika that reducing the deficit should be a top priority of the government and that decreasing the deficit would also help America get out of the recession. I believe that it is also important to maintain funding for social services to help people who are facing financial difficulties as a result of the recession. The deficit should be a top priority because allowing the deficit to increase over the long term will cause take money away from solving crises and result in higher interest rates for future loans (1).
I also agree with the Democrats’ plan to increase revenue and continue social services. Maintaining the Bush Tax Cuts will add to the deficit to the point where in 2015, it will be $400 billion dollars more than the US economy can reasonably sustain (2). The current tax code is full of loopholes and excessive deductions (1). Reducing these loopholes and wasteful deductions as well as lowering rates will increase productivity and motivate people to make more money instead of working to get through as many loopholes and deductions as possible (1). Overall, reforming the tax code would bring it revenue to help stimulate the economy and reduce the deficit. Having short term spending by the government is necessary but having an excessive deficit for the future will decrease the country’s ability to function and provide for its citizens. If the deficit is not reduced, future government funds will be placed toward paying off interest instead of providing for the citizens (1). Reforming the tax code and decreasing some government spending could decrease the deficit by 1/3 (2).
1)http://economix.blogs.nytimes.com/2010/12/10/a-gentle-nudge-about-the-deficit/?scp=2&sq=deficit&st=cse
2)http://www.nytimes.com/2010/11/14/weekinreview/14leonhardt.html?_r=1
In response to EmmaBee:
Although I think you presented strong points n your blog post, there are some statements that I would have to disagree with. Although defense spending is by far the most costly on our government, we as a country and a government have dug ourselves quite the hole when it comes to some of our foreign relations (1). But comparing defense spending to ending the wars in Afghanistan and Iraq is two different topics in my mind.
Also, no matter what your political party stances may be, I feel that one should never be “compelled” to strictly follow one party’s beliefs. If by a liberal standpoint raising taxes is what our country needs to pull out of this deficit, then so be it. But one cannot simply categorize them into a particular party’s beliefs just to say they are so. By saying to raise the income tax for the higher class, it is just stacking onto their current taxes, compared to lower-class America who hardly pays a 3% income tax (2).
As for the tax on soda, I can’t really see it doing anything in the long run. The “stupid Americans” that you’re referring to will probably continue on buying their drinks without it being a deterrent for obesity slashing, and the companies cannot afford for their customers to switch to a different brand just because of a small, insignificant tax. With a deficit of over seven billion dollars, I think it is time for our government to focus their actions towards a more monumental and result-based program.
Nice post overall!
(1) http://www.ssa.gov/history/age65.html
(2) http://www.ntu.org/tax-basics/who-pays-income-taxes.html
in response to R.J.:
Once again, I have to agree with you about all of what you said. I love that you are ‘frank’ when talking about political reactions to unpopular policies. It’s very true that the government is unlikely to take actions against something if the way to get there is through making decisions that won’t be popular with the citizens of America. You did a nice job of integrating our current situation by noting how the newly divided Congress will further affect the economic policy making. I do you think, however, that when you talked about how the Democrats will oppose spending that you should have said that the Democrats will only really oppose spending cuts for social welfare programs. The majority of them would likely praise cuts in defense spending. As for your idea of a higher progressive tax; I think it’s a great idea. I do believe though, that those of us who make more money should pay more and from an economic standpoint this makes sense.
As for a solution coming about anytime soon I really think it’s any one's guess. As you said, the solutions that raise GDP also heighten the deficit and therefore are not really solutions at all. Perhaps the key is to look at a combination of tactics that will somehow offset each other. The only problem with that that I can see is economists would need to look at the problem with even more scrutiny, but economists are not the most compassionate people. Their job is to save money and they’re great at that, but they rarely would keep spending on something that costs America a lot of money- even if it is a welfare program. Overall, your ideas and statements are perfectly agreeable and make a lot of sense economically. Well done sir.
In response to Mr. Annet,
I have to say your first few sentences about the budget deficit go well with your picture. They make you wonder what the heck is going on. I like reading yours because it was filled with statistics and had all of the necessary things that make for a quality argument about the budget deficit. The fact that used almost everything from our AP Economics textbook made me chuckle because this is typical you. I do like your summary as well. It gets right to the point and makes me laugh because it is completely impossible. It is completely impossible to cut taxes and raise spending because the money has to come somewhere if you want to increase spending. In our current political status, everybody has wanted to do this on either side of the spectrum. That is why we never fix our problems; because there are too many people that disagree.
I also agree with you talk about FDR because he takes into consideration the inside and outside lags of the economy, which allows for the economy to always work at a steady rate.
I do however disagree with the idea that we need to continue with the tax-cuts because we already have a ridiculous low tax cut rate, and the only person who was successful, JFK, did it when our tax rates were through the roof. I think we need to increase the tax rate, but not at a ridiculous rate.
AMEN
IT’S A NEW YEAR.
Response to Monica
I disagree on your statement that federal deficit in not a big problem for the government now. I think deficit in the number one priority problem and government should take actions quickly to resolve this issue. If the government fails to act on this i think the economy would get worsen as America increases its debt. Unlike other countries who have debt have borrowed money from its citizens and the government is in debt for citizens, but united states has borrowed lot of money from the outside countries like China and we owe them a lot of money and deficit should be considered a big problem.
I agree with you that government should decrease its spending and increase taxes to resolve this issue. I also support that social security and medicare must be raised to 70 and i don't think government should cut back on defense spending as we are at war and the opposition countries are trying to build nuclear bomb.
I also think not many things will get done in government as the clueless democrats want to keep increasing government spending and just make the deficit rise and make it a even bigger problem in the future. Obama's plan to cut taxes may help to increase GDP but increasing spending would cancel that out.
I thought you post was good and agreeable in some ways
sources
http://www.nytimes.com/2011/01/05/business/economy/05leonhardt.html?_r=1
http://online.wsj.com/article/SB10001424052748703808704576062342133580266.html?mod=googlenews_wsj
In response to David, I mostly agree with him. I think we need to be wary of balancing the budget because the economy is so fragile now. I agree that the commission that simplifies the tax code, reduces deductions, raises the social security age in the future, changes rules on retirement and Employee provided health care is positive. I also agree that more will have to be done to balance the budget there must be increased taxes or more cuts in spending. However balancing the budget isn't what needs to be done now. Yes the economy was nice when the budget was balanced during Clinton's presidencies but that was only so because of the left over affects of Reagan's presidency. His Reaganomics fixed the economy not Clinton balancing the budget. He could only do that because the economy was good enough in the first place.
(1) “Tax Deal on the Verge of Passing”
http://online.wsj.com/article/SB10001424052748703395204576023772342189318.html?mod=WSJ_hp_LEFTTopStories
In response to AnthoNOVA:
I just wanted to say before I respond that your name is awesome, it puts my name to shame.
With your point of view of the first question I agree that there is no immediate crisis with the deficit but if we don't do something now then it may already be too late. The president and Congress are set to have a discussion as of January 3rd about possible cutbacks, one being Social Security(2). Personally I don't like Social Security, I think that if people want to retire then it should be up to them to make the payments.
With your opinion on the second question I couldn't agree more. Spending cuts and tax increases are extremely necessary for the United States to get the budget balanced. The republicans have scaled the domestic spending, not related to security, back by about $50 billion and are looking to take more out(1). This isn't the kind of cuts I would suggest as we need to think about our people's needs more than wars overseas.
With your opinion on question four, I have to disagree. The government officials are not stupid. They know that if someone doesn't act soon to break this expansionary policy then there will be little anyone can do to prevent the fall of the United States as a world power.
(1)http://topics.nytimes.com/top/reference/timestopics/subjects/f/federal_budget_us/index.html?scp=1&sq=us%20budget%20deficit&st=cse
(2)http://www.npr.org/2011/01/03/132624861/senators-start-in-the-middle-with-deficit-talks
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