Post Instructions:

You are an advisor to the President tasked with cutting at least $300 billion from the budget. The president wants your recommendations to cut lines, not large categories. Explain why you chose those cuts.

Note: THESE ARE NOT  TRUE US BUDGET NUMBERS!.

DOMESTIC PROGRAMS AND FOREIGN AID

Cut some foreign aid to African countries

$17 billion

Eliminate farm subsidies

$14 billion

Cut pay of civilian federal workers by 5 percent

$14 billion

Reduce the overall federal workforce by 10%

$12 billion

Cut aid to states by 5%

$29 billion

MILITARY

Cut the number of nuclear warheads, and end the “Star Wars” missile defense program

$19 billion

Reduce military to pre-Iraq War size and further reduce troops in Asia and Europe

$25 billion

Cancel or delay some weapons programs

$19 billion

HEALTHCARE

Enact medical malpractice reform by reducing the chances of large malpractice verdicts

$ 8 billion

Increase the Medicare eligibility age to 68

$ 8 billion

Raise the Social Security retirement age to 68.

$ 13 billion

EXISTING TAXES

Return the estate tax to Clinton-era levels, passing on an estate worth more than $1 million to their heirs would have portions of those estates taxed.

$ 50 billion

End tax cuts for income above $250,000 a year

$ 54 billion

End tax cuts for income below $250,000 a year

$ 172 billion

Payroll tax increase for people making over $106,000 annually contributing more to Social Security and Medicare.

$ 50 billion

NEW TAXES

Institute a Millionaire’s tax on income above $1 million

$ 50 billion

Add a national 5% sales tax

$ 41 billion

Add a tax on carbon emissions

$ 40 billion

Tax banks based on their sizes and the amount of risk they take.

$ 73 billion

Total gap covered by your budget plan

$_________________

Use evidence (cite sources) to support your response from assigned readings or online lessons, and at TWO outside scholarly source.

Summary for discussion post:

Imagine that you’re a high-ranking advisor to the President of the United States (If it helps think of a generic president, not the actual person in the White House), and you’re tasked with cutting at least $300 billion from the budget.

The president wants your recommendations to cut lines, not large categories. Explain why you chose those cuts.

Be sure to list the options you chose with their totals and your overall total as well. Reaching $300 Billion is tough, so I want you to get your total somewhere between $290 – 310 Billion.

———————————–

As you start, this hypothetical budget has a shortfall (or gap) of $300 Billion. You can make-up the difference with $300 Billion in budget cuts, OR $300 Billion in tax increases, OR something that uses both cuts and taxes.

So, let’s say you decide to use the first two options seen in the Assessment:
Cut some foreign aid African countries $17 billion
Eliminate farm subsidies $14 billion

You just eliminated $31 Billion from the gap. And the gap is now $269 Billion!

Unfortunately, you just annoyed U.S. foreign allies and farmers.

So you raise taxes:
End Bush tax cuts for income above $250,000 a year $54 billion

Now the gap is $215 Billion — and you just upset high-income tax payers — many of whom are now upset and won’t be contributing toward your boss’ Presidential campaign; making it harder for you — and your boss — to keep your jobs. Ah the joys of government budgeting! ????

Lesson: Economics

Introduction

This week we will explore the economy, including the impact that governments have upon economic matters and the cost of welfare programs.

The US Budget

In February of each year, the President submits around a $3.8 trillion budget proposal to Congress for approval. This proposal is based on the President’s priorities, and what he believes will pass in the Congress. Once the plan is made public, interest groups, citizens, scholars, political scientists, and pundits begin to scrutinize it to see what spending will go where.

The American economic system is very complicated. It is considered a laissez-faire economy, but this does not mean that it operates in an entirely free market. There are rules and regulations in place to protect the market, and the businesses and people working within it. Some of these safeguards developed during a period known as the New Deal, under President Franklin D. Roosevelt, as a means of lessening the impact of the Great Depression. These protections are referred to as the social safety net or welfare programs.

Welfare is a term applied to social programs that contribute to the overall well-being of the citizens, and these types of programs usually develop when there is a great need within the populace. For example, during The Great Depression, inflation rates made the dollar lose its previous value. The Great Depression resulted in the suffering of a large portion of the population because many could not pay their bills, or buy necessities such as food which was in short supply to being with. Eventually, technological advances, spurred by the Industrial Revolution, made the farming process less difficult, allowing for larger and larger amounts of crops to be produced. Although this produced more food for a while, it also dropped the price of food, given the fundamental law of supply and demand. If the supply of a product rises above the demand for the product, prices will fall.

Supply and Demand

With the fall in crop prices, farmers who had mortgaged their homes and land to afford new farming equipment lost it all because they could no longer earn enough to pay off their loans. Also, the new technology contributed to overfarming much of the land, which stripped needed nutrients from the soil, making it unfarmable for some time, developing The Dust Bowl. With the upper layer of soil missing from much of the farmland in the Midwest, the large amount of dust caused great dust storms as severe as blizzards. Food production suffered because of limited farmland, causing supply to decrease, raising the price of food again. However, given the state of inflation during this time, the average person could not keep up with these costs forcing the government to step in to provide for the people and stabilize prices.

Although welfare programs serve purposes, they are not free. The problem of paying for them falls on every nation that offers them, which is why there is always much deliberation regarding these programs. The United States offers far fewer social programs than its European allies—based upon its laissez-faire approach—and yet there is always much discussion about their existence. American conservatives tend to support a reduction in the funding of such programs, whereas liberals usually argue for an increase in their funding.