The Defict

The Deficit

The issue of the deficit and budget has taken over the headline news. Many are saying if we don't curb our spending our children will suffer in the future. The main reason our spending is out of control is our government has spent an outrageous amount of money on special interests in support of the benefactors that have funded their campaign or businesses that have shipped jobs overseas for tax breaks which occurred in 2004 under the Bush administration. We realize that the economy will always be like a juggling act from year to year. Just so happens that the rich is getting richer and poor is getting poorer. All the proposed cuts that have happened in the past few years were a benefit to whom? I can tell you that the American people are spending more on food and the basic necessities to live than ever before, gas prices has driven many people into debt which affect the unemployment lines and our welfare system, but the oil companies are still raking in record breaking profits each quarter. Most Americans haven't figured out that most of our elected officials have a stake in major businesses or the oil industry.

Many politicians would like to say "If I was President I could balance the budget." In reality many have been in the same seat and only a few have had a surplus during their tenure in office. The most recent was William Jefferson Clinton who turned over the Presidential seat to the Bush administration with a surplus budget in 1996. A few years later our deficit has grown to an enormous amount. We are facing debt that is close to the debt ceiling of 14.3 trillion dollars. The question is, does the high budget deficit matter? Daniel Shaviro said it best in a piece he wrote titled "Do Deficits Matter" this was very interesting reading. Here is a glimpse, "The first issue is generational equity, or concern about unduly benefiting current generations at the expense of future generations. The second issue is what macroeconomic effects deficits generally have. At one time, they were lauded by Keynesians as the cure for recession or even significant unemployment, based on the claim that they increased current consumer spending and thereby stimulated the economy. Today, the same causal claim leads many to condemn deficits as a cause of the low rate of national saving. The third issue concerns their effects on the size of the national government. Some supporters of limited government identify deficit spending as a major cause of undesirable government growth, and therefore advocate the adoption of a balanced budget amendment to the U.S. Constitution". Depends on who you ask, the average working American has not a clue or do they care that our deficit is at its cap. Too many people in our government talk over most people's head with big words while showing charts and graphs displaying what our economy is going through or will be going through 20 to 30 years from now. Yes our children will be the most affected but just like the last 100 years nothing has really stricken our economy like greed has. Big businesses want more and more profits. I am not just looking at big businesses our education system is a burden with this as well and nobody can do anything about is what I find it hard to believe. That is why our job creation is suffering because our students are less educated because of restraints that are on educators what they can and can't teach. Our children are more advanced than we give them credit for. Their minds are going a million miles a minute and if the schools don't tap into that resource to keep them occupied we will lose them to others things like crime, drugs. We do this because programs are getting cut in schools so that the school can maintain its budget for the year. Our education system should be the best of the best throughout the country not just in certain places where the rich live. I really don't understand why I can move my kids from one state to another and the military student's who move every three to four years are the ones who suffer. We all know that we have the best schools right here in America that's why many people from other countries send their kids over to attend college. They learn from us and turn around and go back to their homeland after being educated and help their countries succeed. Young people with their ideas working with the knowledge our educators are capable of giving them can be a tool to help our struggling economy get out of the bind that it has been facing. If we continue to use the same ideas from the same officials that are outdated you will get the same results. That is what happened to the budget deficit here in the United States today. To sum this up Neil Buchanan writes "The federal budget deficit this year is going to be over a trillion dollars." "No, over one-and-a-half trillion." "No, even more than that!" "The deficit is bad." "The deficit is worse than we thought." "The deficit is destroying the economy." "The deficit is ruining our grandchildren's lives."

Fiscal policy is defined in our text on pg 95 as the government's decisions about how much to tax and spend. The fiscal policy should either raise or lower the budget. We also have expansionary fiscal policy in which taxes are cut and spending is increased, this will lead the government in to a higher budget deficit, while contractionary fiscal policy does the opposite that can lead to budget cuts. There is also the monetary policy which is defined in our text as the tools used by the Federal Reserve to control the quantity of money, which in turn affects interest rates. This is a tool the Feds used to help our economy grow or maintain a steady balance. The Feds play a big role in the health of our economy and the performance of it. The Feds are also the agency that writes these blank checks to our government that allows them to continue spending money. Recently the Feds notified congress that we