STUDENTS: NEWSFEED

America's Addiction

jcrawfo1 — Thu, 11 Dec 2008 01:19:40 -0500

After exploring the issues about our rapidly growing national debt, we may need a new generation of leaders who are willing to face up to the sacrifices all of us must make. The longer we wait, the more intense our addiction. If only people cared we would not shift the burden to a younger generation. Help us make a difference...

Federal Budget Ideas

StacieM — Thu, 11 Dec 2008 00:58:33 -0500

Many Americans would agree that the National Budget needs to be balanced. The toughest problem with balancing the budget is getting everyone to agree on how to do this. International debt owed by the United States is a major problem that is going to greatly affect many generations to come. While it will be difficult for the government to reach an answer that the majority of the population agrees on, it is not impossible.

Some causes to our drastically high international debt are the fact that we, as a whole, live well above our means. We as a nation expect the government to provide for everyone, but we do not like to pay higher taxes. Many Americans do not pay any taxes on their income; many Americans get thousands of dollars as a refund every year without paying any taxes in to the government. This money is expected to help people who live below poverty levels to pay their bills, and get necessities for their families. How many of these people go buy things with this money which is not needed, for example game systems as well as many other items which are not needed.

A bill needs to be passed with congress to lower the amount of money non tax paying citizens receive as a refund. While people living in poverty do need to extra support to make ends meet, what they are being given could be lowered and still cover these needs.

Another cause of our growing debt is spending by government officials. There are too many loop holes in current laws, allowing bills to be passed without everyone knowing what is being voted on. The government needs to be held accountable for the money they spend as well. New laws need to be adopted so that the public is aware of what is being presented to Congress, making it more difficult for unacceptable spending to occur.

Medicare and Medicaid are both very important to the elderly and children. It costs a lot of money to keep these programs going, but the benefits of having them far outweigh the consequences of not having them. If these were lowered, it would cost citizens and the government much more than it does to pay for the preventative care they provide.

Social Security is one of the most important issues with the national budget. With baby boomers growing older, this is going to cause more debt for the government. People believe they are entitled to Social Security so not as many people save, as they could. More incentives need to be provided for people to begin saving more money for their own retirement. The elderly and children need to be taken care of, so every effort must be made to continue these programs.

Currently some states do not charge a state income tax. Some people in the states which do not have state tax agree that they would accept a state tax if it would fix their concerns, such as funding education, infrastructure, and health care. When these states have a disaster, they ask for government assistance to help recover, but if they had a state tax, they could better provide for themselves with less assistance.

The United States as a whole needs to learn to live within their means. Families across the nation have to budget their households every day to provide for their families. A certain percent of their income goes to pay for things such as shelter, food, and clothing. Why should it be any different for the government? The government needs to prioritize what the citizens believe are the most important issues such as social security, health care, and education. From those area’s, however many that may be, they should do like everyday citizens do and budget a certain percentage of the available money from revenue towards these issues in order of importance. A certain amount should also go toward paying back our international debt.

Citizens need to be more responsible when electing government officials, only electing those who have the best interest of the public instead of the best interest of their pocket book. The government needs to be more responsible by passing laws to prevent the loop holes which allows for fraudulent spending, and allowing presidents to pass laws at the end of their terms to line their own pockets. There are many areas of the budget which needs changed and it will be very difficult to agree on a solution, but it is not impossible.

For the Love of Money

wunit1530 — Thu, 11 Dec 2008 00:56:56 -0500

For the love of money is the root of all evil. It is crazy what money can do to people. As the O’Jays would say, “Some people got to have it, some people really need it, that mean green, People will steal from their mother and rob their own brother, for the love of money.” Is the almighty dollar really worth it? Americans are in a financial crisis because we are spending money that we do not have on things we do not need to impress people we really don’t like. We are placing ourselves in a financial situation and not addressing the spending problem so many have.

The twisted mentality and concept on money management is what ruins so many. America has not worked out the kinks in their mind set when it comes to spending. This spending could also be caused by the uncontrollable use of the credit card and the payday cash loans located on every street corner. We are allowing credit cards to reach their max and sometime exceed the available credit. When we add up the cost of the new house, car, and lavish living we find ourselves with outrageous bills and not enough income to pay for it.

Living above your means can create a financial crisis. Statistics show the average individual is in approximately $18,000 worth of debt. Americans are not able to distinguish the difference between needs and wants. The fundamental needs in life such as food, clothing, education and transportation would be enough to sustain us. The average American would pursue their wants in life such as purchasing designer clothing and a Benz or Bentley when a bus pass will always provide transportation. Indulges and greed are common mistakes made in financial binds.

Now, we think about the people who are living the life. These people are the careless spenders that are going to the banks asking for loans to pay for these despicable credit card bills. When these spenders pay off the bills, they now owe the same amount of money to the bank. Therefore, not only are people spending their money carelessly, but the banks are giving money to the people who are stuck in these financial situations.

A money management solution to getting out of debt and pursuing wealth would be first to confess there is a financial problem that you do not have control of. An individual will have to work. Obtain employment and know where you are financially. When you gain employment you start with 100% of your total income. Stop visiting the payday loan institutions and stop using credit cards. Make arrangements with your current creditors and keep pay arrangements making frequent payments on the accounts. Start with the small amount first then evaluate the account with the higher interest rate. Finally, the most important solution will be to realize you must allow patience in the process.

With the new opportunity for change in the government the United States may still be able to recover. We are hopeful with the creative ideas and energetic outlook that the new president-elect Barack Obama will introduce will help our economy. If everyone will process a positive change our country can recover. The debt is continually rising so now is the time to take a stand on making an improvement with finances.

Our Looming Fiscal Crisis

platypus — Thu, 11 Dec 2008 00:42:53 -0500

This is a brief powerpoint about my views on our national debt and two charts that I found on the internet.

The Decline Of The Economy

mbarezin — Thu, 11 Dec 2008 00:26:37 -0500

America’s fiscal crisis is complex. Although the economy has always had its highs and lows, the recent subprime mortgage crisis, a $10.6 trillion national debt, and a growing unemployment rate are all indicators that America is in a recession. Though this paper may simplify the solutions needed to help the economy recover, they are based on sound economic principles.

The national debt is the most pressing issue. Debt builds when I spend more money than I make. A national debt is not something new for America, but the size of the debt is alarming. Since 1981, the national debt has increased by a factor of 10. So even in those times when our country’s economy was booming, the amount of our debt increased. Solid financial planning always includes debt management. Currently, America has failed to manage its debt. Fighting two wars overseas, funding unnecessary projects, and the reduction of manufactured goods in America have contributed to this debt. As debt grows, so does the amount of the interest payment. This makes paying off that debt more difficult, since much of the payment is going towards the interest. However, with a lot of diligence, perhaps in 30 years when my children inherit the economy, they will have a debt-free America.

Since many economists believe that this country is in the greatest economic crisis since the Great Depression, it is time America prioritized its spending to get itself on solid footing. This is perhaps the best way to reduce the debt. Cutting spending is never easy. The President will need to appoint some responsible people to evaluate our current spending and make the tough decisions on where to cut. In my own life, I’m not going to renew my season tickets for a professional sporting event if I don’t have enough money to pay my bills. In the same way, America needs to fund the essential programs for the well being of our citizens, while putting on hold those trips to other planets, developing new sophisticated weapons, or studying the mating habits of fruit flies. Although these and many other programs have value, they dwarf in comparison to Education, National Defense, cures for diseases, etc.

Once we get serious about cutting the excess, next America has to invest in herself. People need jobs and America needs improved infrastructure. The government could invest in public works programs to get people working while improving America. This is a much better approach than putting much of our current workforce on welfare because there are no jobs available. The worker then pays taxes back to the government. These taxes could be earmarked to help draw down the national debt.

Another category of public works is energy. America must free itself from its dependence on foreign oil. The government could invest in nuclear power, wind farms, and other alternate fuels. This would help keep our workforce employed while lowering our importing of oil. This in turn may also help to balance the current trade deficit. The more we invest in America, the stronger our nation will be.

It seems to me that in these tough economic times, that priorities need to be set and we must have the courage to follow them through. We must be wise with our spending and put on hold those programs that do not directly benefit mankind. Developing a car that flies or a creating a domesticated robot are worthwhile tasks, but should they be placed higher in importance than feeding our hungry?

If we refuse to see the danger of the high national debt, the value of our dollar will diminish. Our standard of living that we currently have will disappear and we will find ourselves second rate to the economic powers of the world. This is the time to have courage and make the tough decisions necessary to get America on solid financial ground.

Facing Up: Opinion Columnist

bweezyonthetrack — Thu, 11 Dec 2008 00:04:18 -0500

America is indeed being faced by a looming fiscal crisis; there is no way around it and it could have potentially catastrophic fallout. Something needs to be done and the only way to figure anything out is to first break it down piece by piece and to look at the problems. In doing so, it can easily be seen that we are facing a number of various different problems. The main focus of this essay will be on just a pair of these major problems that can obviously be seen as contributors to the problem.

First, our Social Security and U.S. Treasury organizations are facing a catastrophic situation that if not resolved, could be a final and dominant piece of the U.S. free market economy collapsing and finally falling into depression. This problem is due in majority to the baby boomer generation that will soon be retiring; many of these citizens have do funds invested in U.S. Treasury bonds (trust funds). This should be a good thing for the government to have its own citizens investing freely into it. Most citizens take a feeling of comfort by knowing their money is in the government and they can count on their assets there. The problem with this is that the government is liable for every dollar invested in these trust funds and has not been able to fulfill this responsibility to the fullest extent and honor the money they are responsible for. This is not just a minor difference between the funds liable and the amount of money that isn’t there; our current best estimates show more than a $13 trillion dollar contradiction between the two. The system will be held responsible in redeeming this deficit in the near future, which could mean a few things for today’s’ workforce. This is a problem considering that researchers have said we will be the ones paying more in tax benefits over the next 10 years to accommodate for these unseen funds than the total tax revenue itself in that time period. U.S. Federal Reserve Chairman Bernanke agrees, it is imperative we take “early and meaningful action” (in response to challenges we now face.) He spoke this opinion to the Senate Budget Committee, he also added (if we don’t respond soon); “the economy could be seriously weakened…with future generations bearing much of the cost.”

If our financial crisis at home is not taken care of, it could have extremely detrimental aftermath. This would be in worse case scenario, if our market fails, economies all around the world would also take huge hits. So, this could become a nightmare for the global economy very quickly if we don’t do something before its too late. A Professor at the Centre for Economic Studies and Planning at India, Prabaht Patnaik, said the cause of our problem was a general defect in our free market system. The problem and point he acknowledged is that our system is “…dominated by speculators not interested in the long term yield assets but only in the short term appreciation in asset values.”

However, to begin turning things around, I believe we first need to make a few major reforms. First, temporarily raising taxes seems plausible to repay our Treasury debt. Instead of doing so, we should make an attempt to devise a more permanent plan; one would most likely think this is obviously the best option to do so. One more long term option would make American workers capable of avoiding worrying about a congress that spends too much and wonder if they should invest money into the government by making it available to individually open and fund personal retirement accounts. That way the money is virtually guaranteed and would be more personally profitable in this type of account. This according to freedomworks.org; although the interest rate and benefits of these personal accounts are modest, it has been shown they would indeed pay better off in the long run than accounts and trust funds invested in or controlled by our government.

Another reform one would benefit from would be in association with and draw attention to the biggest looming crisis that also has a direct effect on the problems faced by the U.S.; the global economy. If a global financial institution were established, it would create a little bit of a global stabilizer in each economy. This could be very suitable for the U.S. and the global economies as a whole, as would any other positive effect right now. Perhaps; this would be the small beginning of that turn around for the U.S. This could also begin to show other ways to start relieving the pressure to fix other pieces of our largely looming fiscal crisis.

The Future Of American Politics: A Learning Experience

adria064 — Wed, 10 Dec 2008 23:22:40 -0500

What is the future of American politics? It is optimistic and hopeful, or are we doomed to a prolonged recession? Currently, the economy is down, people are unable to sell homes or get mortgages, large companies such as General Motors are struggling, and the government is trying to work out a way to stimulate the economy while solving lingering long term problems. A major problem is that a lot of people don’t know about or understand the fiscal problems that our country is facing. The freshman seminar, “The Future of American Politics,” taught by Dr. Kettl, focused on the issue of raising awareness about the federal budget crisis. The point of the class was to become more informed about the present fiscal problems, and raise awareness among college students by marketing the information in an interesting and creative way. At the beginning, the members of the class had to be educated about the debt, the deficit, and the difference between them, among other things. In class, discussions were held about the best way to reach the massive population of college students. The class tried to think of ways to use viral marketing strategies through things like as online satirical videos or short weekly blogs that provoked strong emotions. By the end of the first month, the entire class divided into groups based on common interests, whether it was marketing and advertising or blogging and video blogging. The projects continued to progress through the next two months, culminating in an impressive portfolio. The largest group consisted of five people interested in different methods of advertising and marketing strategies. The primary idea was to create and market an ad campaign, using characters that would show college students exactly how the federal budget crisis would affect them later in their lives. Hannah and Michael came up with the idea of the ad campaign, which would gather attention by starting with something simple. Anna and Adria helped develop the idea of the ad campaign, and each contributed a character, complete with a biography and picture. Aaseesh presented a concept for a single logo, and together the group came up with the “Pound-It” idea, as in pounding the federal budget. The main project of the group was the elaborate website, initially designed by Aaseesh and then added to by all other team members. This website, www.pound-it.org, created a central point where all the class’s content could be uploaded and accessed from.One of the main points on the website, was the weekly blog developed by Kelvin. Kelvin went after shock value, creating an “Outrage of the Week” blog. These blogs were on topics ranging from how much each person owns of the national debt to earmarks, and were uploaded each week. The “Outrage of the Week” blog attracted attention every week because of its shocking new headline, along with the fact that it was a quick read. Meanwhile, Sami and Keara were already publishing letters in well-known local newspapers. They did research on the specific demographics of the Philadelphia area, and then wrote Op/Ed pieces directed at the people of the city. They were able to get published rather quickly in newspapers such as the Daily News. After the Fiscal Wake-Up Tour, Sami and Keara attempted to figure out just how Philadelphia factors into the federal budget, using new mapping technologies.John and Will created YouTube videos that showcased how little students knew about the national economy. Using “Man on the Street” episodes, they interviewed random students about their present feelings about the economy, political situation, and presidential election. On Election Day, they ventured out to polls and asked people what factors had strongly influenced their decision. The last video John and Will produced was of the class itself, talking about what they have learned and what they have accomplished. All videos are able to be seen on the website, where all past and present blogs can also be viewed.Kristen, Jess, and Clare decided to make a pamphlet to hand out to different groups of people. Their main goal was to dedicate a pamphlet specifically to each generation, focusing on how the federal budget crisis would affect each group separately. To gather the information, they interviewed teens, working-age adults, and senior citizens. The end result was three polished-looking pamphlets dedicated to each age group. They are currently figuring out ways to distribute these to people of all ages. Harold wanted to write about the health care system, and ended up researching who has health care, who doesn’t, and why. While he originally had ideas that were a bit too big for the scope of the project, Harold ended up simplifying his argument so that more people could understand and be persuaded to agree with him.Every member of the class contributed to their individual projects, which in turn created a rather full website, with easy-to-understand content that is readily accessible to anyone. The website looks extremely professional, and people have even added an “in the news” aspect that is updated when any major economic event occurs. Each class member also participated in John and Will’s last video, about the experience of trying to raise awareness about this issue, and what they learned from the class as a whole.Throughout the course of the class, each student became somewhat of an expert on the economic situation, as well as other current issues. The ability to really ask questions and discuss what was going on was helpful, and created an environment where everyone was learning something new. The website became the largest achievement of the class as a whole, and it will continue to be updated and hopefully used by youth around the country. While everyone is still uncertain about what exactly the future of American politics is, hopefully the work done by this class will contribute to making this future a brighter one.

Solutions for Reducing the National Debt in the U.S. - Ideas from a Chinese Student

liumozhu — Wed, 10 Dec 2008 23:11:22 -0500

It is quite obvious that now the U.S. government has so much debt. It has been said $53 trillion. How did the U.S. end up getting this huge debt? From the data on facing up website “Federal budget: expenditures” we can see medical care, national defense, Social Security, and interest on debt are the largest part of expenditures of the U.S. government. The largest percent is for Social Security. I want to talk about three parts: Social Security, national defense and medical care.

The world of medical technology is improving, which means people tend to live longer. The more old people we get, the more funds we must budget for Social Security. Since there is a limit, eventually the budget of the U.S. would be facing a shortage of funds. Therefore, we need to have another way of funding Social Security or we are not going to have the same Social Security system in the future. Social security should not give people extra income they do not need. Also, if one person works and the other one does not have a job, the money from Social Security should be different. For example, the person who has a job can get $500, and then the other one who does not have a job can get $1000, creates the wrong kind of incentive.. Those who are working, they should save money for later when they get old. However, there is one problem if the person did not have a job. Without a job to earn income, how could people save money for when they get old? So I think changing Social Security is much better idea.

For national defense, it is the second large for spending more money in the U.S. For example, in last 50 years, they spent more money for Korean and Vietnam wars. Since 2001, the US spent more money for the war in Iraq. It lasted 8 years. They always waste more money and did not do many things for really helping. They borrowed money from other countries to keep sending the military to Iraq. They should stop sending people and stop having wars. Especially since war does not solve anything; it just wastes their money. From the website ), we can see the data. From 2001, when President Bush started being in charge as the president for United States, the war’s debt is increasing. It is really a big number for the red part. He made it worse. When he was the president in American, they spent more money for wars. So the rate of change for national defense is rapidly increasing in the national debt.

For medical care, more and more people need to go to hospital, and it costs a lot of money for seeing doctor in the United States. If having more people to see doctors, it means the country has more budgets for the medical care to take care of people who need to see the doctor. For example, in a town, there are 1000 people, when in a hospital there are 800 people, they all need to see doctor, and they need more hospitals. So they need to give more budgets for building hospitals or to have more medical equipments. So in the US, if there are more unhealthy people, they can not work and do more things for the government. So the government will lose a lot of employees. So, people’s health is good for the economy and good for the government. So if people need more hospitals or doctors, the government needs to build for them. Also, the US needs to do the solutions for interest on debt, Medicaid and S-CHIP, other income security, other retirement and disability programs and so on. They look like so small percent, but for the whole country, they are really big numbers. So the government needs to do something for reducing the debt.

These are my ideas. Maybe they are not good ideas, but I think it can help the US to reduce the debt. These three main parts which are Social Security, national defense and medical care, are really very important for debt in the US. So they need to be in control of the government. If the government does not control, its greatest areas of spending, the national debt will keep growing.

We have potential America!

bfuller — Wed, 10 Dec 2008 23:01:26 -0500

Throughout careful examination, research, and outlook into the activity of the government, one could find it completely obvious and resultant of three main factors contributing to the national debt. If the newly elected leaders of America pull troops out of Iraq and Afghanistan, eliminate pork and barrel spending, and grant Barack Obama the line-item veto power, our nation will begin to repair the severe financial deficit, and repair the U.S. economy. There are many ideas towards repairing the currently damaged economy, throughout this essay, only a few will be mentioned. The possibilities are endless and ideas are increasingly open for discussion. The introduction of these ideas, although come from a personal view, are completely significant and idealistic with regard to the our severe financial problem as a nation. Although the problem seems to be non-influential towards the everyday working man or woman, this negligence could be an enormous issue if it is not handled properly soon.

The war in Iraq is currently costing the United States seven billion dollars to conduct. Secondly, according to the national post, the military operations in Afghanistan are expected to top one billion at the end of this year. Some Americans support our insertion of troops into these countries without knowing why the placement was purposed to start with. When Bush claimed the possession of weapons of mass destruction in 2003, and proceeded to bomb Iraq, the spending began. Everyone knows now that there have not been any findings of such weaponry; however we are still factoring in the spending of being present there to this day. The third major cause of the severe national debt is due to pork barrel spending. For example, the bailout bill had millions of dollars of pork, including contributions for a souvenir bow and shop.

As far as consequences from this economical problem, many ideas become apparent. One serious affect of this national financial deficit is inflation. The devaluation of the dollar is creating enormous issues. Not only does this cause suffering for the American people’s spending, but also elevates the worth of the euro. Another factoring causation from this issue pertains to increasing interest rates on loans.

We do have these problems. However, there are always alternatives, which electing a new president was an excellent start on the process of the transition. With the entrance of a new leader of our nation, we need to act accordingly by supporting Obama and granting him the “line-item veto power”. This would enable the president has the power and ability to veto individual parts of legislation rather than the legislation as a whole. With this idea, millions of dollars can be utilized in more productive manners. To piggyback onto alternative functions to reduce government spending, we must pull out of Iraq. One could find it safe to assume that taking out their former leader and helping to establish order over the past half-decade, our help has been significant. The last idea for a potential fixation on America’s debt would involve passing the automotive bailout. In the interim, the national debt would increase; however, it can be considered an investment that will accelerate the BIG 3 into the future! While this idea seems to be non-productive towards the economy, with the BIG 3 increasing revenue, the loan would be quickly paid back, leading to a very much needed boost in the economy. Rather than accepting loans from foreign countries such as China, in the form of government stimulus checks, investing funds on American busines’s would be presumably much more efficient in looking towards the future of our economy. Limiting these bailouts would be key in patching one of the biggest wholes in the recession and the current and present economic downturn over the past decade.

A message needs to be addressed to the American people. Black Tuesday seems to be inching closer to an encore each month. With the right tools and ideas, we can save the economy, which includes all classes and wages. If the newly elected leaders of America pull troops out of Iraq and Afghanistan, eliminate pork and barrel spending, and grant Barack Obama the line-item veto power, our nation will begin to repair the severe financial deficit, and repair the U.S. economy. Throughout the next presidential term, we as Americans can only hope that current economic status is to be written in a history book as a simple fluke, due to a possible misdirection with the presidency. Obviously the American people see hope and light with the president elect, reverting to the “blow out” victory in the election.

The Importance of Education, Transparency and Accountability in the U.S. Budget Process

zteid3313 — Wed, 10 Dec 2008 22:45:24 -0500

During the heightened political season of the 2008 campaign there was considerable discussion of the national debt, yet the extent to which the issue is understood is debatable. While we cannot dispute the fact that deficits and debt result from an imbalance between spending and revenues, there are a number of contributing factors to be evaluated. One issue is the general public’s level of understanding, which has implications for how transparent the process actually is and accountability that the elected officials feel. Currently the U.S. budget process is too complex with confusing differentiating terms that provide room for politicians to try to favorably spin budget terms for their self-serving agendas.

When we discuss core concepts of the budget, deficit and debt we must acknowledge there are multiple definitions, so one can hardly blame the public for being confused. The off-budget captures federal entities of the Social Security trust funds and postal service, while the unified budget is the terms the encapsulates both the on and off budgets. However, even the unified budget still doesn’t include liabilities like the federal bank deposit and private pensions.[i] So we can begin to see how complex understanding the process is when even a concept that seems all encompassing, like ‘unified budget’, fails to capture the entirety of the budget.

Adding to the confusion is the multiple kinds of deficits, which politicians feel no need to convey. Currently the surpluses of Social Security trust funds are used to offset the deficits in the on budget, or at least that is how many in Washington have tried to present it. By relying on unified budget terms politicians have been able to present the deficit at lower numbers than the deficit excluding Social Security. As politicians paint a picture far rosier than reality they have chosen to hide behind the off-budget surpluses when increasing levels of spending, and there has yet to be a truly significant pushback on such actions. Differentiating the deficit without Social Security is significant because as the baby boomer population retires the trust fund will need to call upon the U.S. Treasury for the money that has seemingly ‘offset’ the on budget deficits. Over the years the deficit excluding Social Security has been far larger than the number that has been presented to the public as the deficit. If the public does not understand the difference between the unified deficit and the deficit excluding Social Security then they won’t be able to demand that public officials clearly distinguish the terms during budget proposals.

Even though the deficit is an annual term, they accumulate into the long term consequence of the national debt. Lacking a pushback on budget deficits the reality has become a public not confronting the mounting debt with politicians who are running away from it. Without a sense of clarity on the yearly budget process we face a compounding debt so standardizing the terminology of budget figures can be one step forward. Demanding the politicians rely on the on-budget deficits will not alleviate the standing debt, nor will it solve the looming baby boomer problem for the Social Security trust funds, but it can help in curbing future deficits and adding to the debt.

Just as there is a lack of clarity in budget terms for on/off and deficits, there is confusion over the meaning of debt. The federal debt is defined as ‘the total amount of Treasury debt and agency debt, consisting of the debt held by the public and debt held by trust or special funds’. The publically held debt is where the Federal Government borrows from the public to finance the deficit, and to do this the Government must compete for the financial resources in the credit market.[ii] Congress is responsible for setting a public debt limit, but this has no control on how much the government will borrow/owe as there are other means for financing the debt.[iii] Besides the publically held debt there is also the debt issued to Government accounts, this is how the Government utilizes the surpluses in items like Social Security trust funds. Additionally there has been more borrowing outside the United States as the Federal Government has used foreign holdings, with the percentage of debt borrowing from foreign holdings reaching 72.

[iv] Now we see that there is a plethora of terminology available when discussing debt, deficits and the budget. The implications of this multiplicity is that the actors in the budget process, mainly those pushing their agendas, are able to pick the terms best suited for their proposals. This is made possible not only through the confusion, but through the general public’s lack of understanding. While some can claim the budget to be transparent with documents and hearings being open to the public, this claim is meaningless without an adequate education system to make such transparency effective. It should not take a graduate level course to understand the U.S. budget process that impacts the general public. If we are to truly better ourselves and seek a path to correct our mounting debt, then we must examine the educational system to find ways to incorporate such necessary material.

When education levels on the budget are increased, the public will be better equipped to hold public officials accountable. Understanding the meanings behind deficits/debt the public can empower people to challenge elected officials on their proposals. As the public grasps the extent of our national debt they will be more inclined to stand up against increased spending. They will realize it’s not just the publically held debt, but also the foreign borrowings that need to be considered. Further transparency is needed to reform the problematic earmark process and put new pressures on Congress. Incorporating budget education to high school courses will not make everyone budget experts, nor will it cure people’s tendency to expect government to solve their problems with more spending and simultaneously keeping taxes low. But this can be a vital step in recognizing the alarming national debt and moving forward.

[i] Schick, Allen. 2007. The Federal Budget: Politics, Policy and Process. Brookings Institute, p. 47

[ii] Office of Management and Budget. Analytical Perspective: Budget of the U.S. Government, Fiscal Year 2008, p. 224

[iii] Schick, Allen. 2007. The Federal Budget: Politics, Policy and Process. Brookings Institute, p. 123

[iv] Office of Management and Budget. Analytical Perspective: Budget of the U.S. Government, Fiscal Year 2008, p 234

The Financial Crisis of the U.S. Today

suyenjin — Wed, 10 Dec 2008 22:44:20 -0500

When Lehman Brothers, which had been a global finance service firm, bankrupted, the whole nation went in to the big confuse. To start with the bankruptcy of Lehman, many big companies, which are related to investment and banking, are going through harsh crisis. Most of citizens in the U.S and the other countries started to recognize the national financial crisis with the bankruptcy of Lehman Brothers. The economic crisis of the United States affect to other countries is really enormous. Economic situation of many countries are depends on that of the U.S. that it is not excessive to say that this crisis of the present is the world economic crisis. Besides, this country has lots of accumulated debt which most people did not concern before the crisis was on the surface. According to the U.S national debt clock, the debt as of 10 December 2008 of the U.S is more than $10.6 trillion. It is getting rising rapidly and the debt percapita is about $35,000. The U.S. government does not have money as much as people expected before. Moreover, this country relies more and more on China and some of Middle East countries. It was not long ago that people realized the current situation of the U.S. Can you believe that the government of the world’s strongest country does not have money and does have lots of debt?

The main start of this crisis was the collapse of subprime mortgage. I thought that mortgage is a really good policy before I met the financial crisis. The biggest fault of mortgage was the case that people cannot afford to pay for it. As a result, Lehman brothers was bankrupted and every firms and countries which had a loan from Lehman. Everyone started to worry about their future and reduce their expenses.

In my opinion, the way of reducing this tremendous debt and restore a healthier economic future for the United States depends on the government. The first thing the government should do is to relieve citizens and to show them their ability to solve the problem. The reason people do not expense is that they worry about current economic situation and do not want to use as much money as they used before. The second, the government should put effort to reduce the cost of raw materials. The consumption of people is getting lower, but the company cannot lower their product under a certain level. Lowering prices is not good for company itself, too. So, government should lower the price of raw material to help companies by lowering their price without much worry.

I think this crisis will be relieved and the world’s economic situation will be better than right now in few decades. In the condition of we can handle this crisis well, when our generations work actively in the future, we might not have this kind of crisis, and the financial situation might not be as hard as that of today. When we consider the economic history of certain countries or the world, there have always existed repeated economic down and up. Many people say that this is the most severe world’s economic crisis after the black Monday or even worse. It can be more serious than the black Monday. However, if we solve the economic problem and pass the crisis of today well, we will be able to enjoy better future than ever.

United States Government: Nation's Debt

jwinkler — Wed, 10 Dec 2008 22:27:11 -0500

The National debt for the United States of America is somewhere around $10trillion plus. Experts expect that this trend will keep going up in 2012 they expect it to be around $12trillion or more. The big question is what can we do about this to stop our bad habit of constant spending?

If we look back at our history going back as far as the gulf war when Bush was in office we had a debt of about $3-4 trillion. But then after that was when President Clinton took office he was about to stabilize our spending. From the time Clinton took office he was able to cut our spending and raised our revenue by 35% and of this 35% he only spent 9% of it. But since George W. Bush took office he has been about to only raise about 10% revenue and we are spending 25%. So that being said we are spending more money then we are actually receiving.

If we don’t find away to stop this and lower the national debt then there are some major consequences that could happen. If we do find away to bring this country out of debt or at lest find away to lower the national debt then there would be some great things that could happen. If we don’t find away to fix this problem then we could possible see a second great depression. If we were to see this happen many of us in America aren't ready for that and it would possibly hit us harder than the Great Depression did itself. There are many more terrible things that could happen that we are not ready for. With is constant increase in spending and no saving it could cause inflation and could then adversely affect the job market and hurt the economy even more than it already is. This would increase the rate of unemployment and make it that much harder for us to come out of debt and would could possibly be another Depression. But if we do figure out away to get out of debt then there would be very great rewards. A decrease in debt would increase the value of the dollar along with help out our economy. A decrease in debt would help out the economy in possible decreasing inflation and increasing the number of jobs in the job market. With the decrease of debt now would pull out country’s economy out of recession and keep it from going into another great depression.

There may be many ways to do this and it would be great if they all worked and all agreed on one to choose. But let’s face it that would be unrealistic because we know nothing is ever that easy. I’m not sure that everyone agrees with this but I know a lot of us do, we need to gradually start pulling out of Iraq and cut our spending there. That is probably the largest expense that we have in this era under George W. Bush. Probably one of the best ways to do this is to gradually turn it over the Iraq police and military. But for this to happen things will probably get worse before they get better. By doing this it would decrease spending by our national government and increase our revenue. Another way to also decrease spending would be to decrease the unemployment rate for the United States of America. But in order to decrease unemployment we need to start watching what we spend our money one. What we could also do is take some of the money that we earn and put it into savings. Something that the government could do to help out the unemployment rate is lower taxes. Buy doing this people would have more money to spend and would be willing to spend it. With more people spending money this would create more jobs in the job market there fore decreasing the unemployment rate.

With all that being said America need to pay more attention to the national debt, because if we don’t then it will come back to be a very dangerous thing for us and could possibly be to late for us to come out of it. But as was stated early one of the best ways to fix this problem is by getting out of Iraq. Also if we decrease the national debt then that would help out our economy. If we do this then the unemployment rate would go down and people would spend more and keep our country from going into a Depression.

Causes of our National Debt

lharris — Wed, 10 Dec 2008 22:02:59 -0500

The U.S. today spends way more money than needed. People are spending more and more money on wants instead of needs! Individuals just want more these days. Part of the constant growing debt is from people spending all of this money, even when they don’t have it. Individuals are taking out loans more often because it is so easy. They then have trouble paying off those loans. The banks that give out these loans don’t worry about it, until now, because the government has to bail them out. Companies are spending more and not making as much, therefore they are also going into debt, and when companies and individuals go into debt they have to ask the banks for help, but if the banks are having trouble, then they are not able to help out the businesses.

Something that was a huge impact on debt was sub-prime loans. When banks would give out loans with really low interest rates, individuals thought this was good, but once the initial low interest rate period was over, interest rates rose. Once this occurred, individuals couldn’t afford their loan payments anymore and therefore started going into debt. As well as when banks would give out loans and then sell the rights to that loan to another bank, once the second bank got the loan they could do with it as they pleased. So if they decided to raise the interest rate the individual who took out the loan would be in trouble and not be able to pay the payments on that loan.

Our current national debt comes to approximately 14 trillion dollars. This has about doubled since the year 2000. It seems like the cost of everything has increased. The Median household income has risen 17 percent, from 42,000 dollars in 2000, to 49,000 dollars in 2008 (Quinn). The consumer price index has risen from 168.8 in 2000 to 220.0 in 2008; this comes to a 30 percent increase (Quinn). Consumer credit went from 1.54 trillion dollars in 2000, to 2.59 trillion dollars in 2008, this is a 68 percent increase (Quinn). The average home price has increased by 49 percent, from 139,000 dollars in 2000, to 206,500 dollars in 2008 (Quinn). These are some drastic increases in prices that affect everyone.

These days, people have to spend more money on their everyday costs of living. The price of everything seems to have risen. Individual’s everyday costs have increased since 2000. Electricity cost has risen 25 percent, it was .084 dollars per kWh in 2000, and is now .105 dollars per kWh (Quinn). Milk was 2.78 dollars per gallon in 2000, and is now 3.87 dollars per gallon in 2008. This is a 37 percent increase (Quinn). Bread 41 percent, eggs have risen an outrageous 122 percent, orange juice 40 percent, and ground beef 57 percent (Quinn). These are some of the items that people use everyday that have gone up dramatically!

The war in Iraq has also changed everything dramatically! The government has spent so much money on that war, and it’s still not over! We have lost so many soldiers in this war, which when a soldier is injured or killed, that is another increase in cost, from hospital costs, to costs to send out a new soldier in their place! As of 2008 to date, we have spent approximately 600 billion dollars on this war! We should not need to spend near that much!

Since 1975 our federal debt has risen from 542 billion dollars to more than 9 trillion dollars (Quinn). Showing debt as a percentage of GDP, it is now at 60 percent when it was at 35 % (Quinn). Our tax dollars are going into things that we don’t have hardly any control over and we don’t see changing. Approximately 27 percent goes into the military whether we support the war or not (Quinn). 21 percent into health care (Quinn). 19 percent goes just into paying off the debt (Quinn). 12 percent into other stuff (Quinn). 6 percent goes into income security (Quinn). 5 percent, into education which I personally think this should be a lot more (Quinn). 3 percent into Veterans benefits (Quinn). 3 percent goes into nutrition (Quinn). 2 percent goes into housing (Quinn). 2 percent has gone into the environment (Quinn). And only 0.3 percent into job training (Quinn). So as you can see, instead of our tax dollars going towards things that affect us from housing to education. The government is spending it on things that they need it for.
All of these things are some causes of why our national debt is so bad. Our inflation is sky high now because of this and we are on the edge of a recession, if not already in one. Individuals, as well as businesses need to start cutting back on everything they are spending and stick to the essential needs.

Works Cited

Quinn, James. America’s Fiscal Crisis: Tough Decisions Needed Now. Seeking Alpha. August 17, 2008. http://seekingalpha.com/article/91274-america-s-fiscal-crisis-tough-decisions-needed-now.

Strategy Economy Development in the United States

wdnrainbow — Wed, 10 Dec 2008 21:21:25 -0500

2008 is a tough year for the United States. “In a report to Congress, the Bush administration says federal expenditures will exceed revenues by $389 billion this year, and by a record-high $482 billion in fiscal year 2009” (Bowman). The huge federal debt and unfunded liabilities makes the United States face a deepening financial and economic crisis. Actually, the crisis somehow quickly spread all over the world.

Students graduating from my hometown in China have indicate it is much more challenging to get jobs. Hopefully, it will not reduce my opportunity to go to graduate school and then contribute to our global economy.

In my opinion, there are three major causes of the crisis. Firstly, the United States housing bubble is a major factor. Housing market is always an important part of economics. When home prices reach the peak of the market, many speculators try to get profit from the market; however, the speculation made the housing bubble rapidly become bigger in an unhealthy direction. Secondly, following the housing bubble was the subprime mortgage crisis. Many large banks were involved in this crisis. Actually, it is not a short-term phenomenon; the roots of it can be track back to last several years of 20th century. Problems were not formed only by several actions, but a series of weakness in the market and specific industries. Thirdly, the more towards pure capitalism, emphasizing market and less government. The role the government should play in today's economics become more and more important. The relationship between microeconomic and macroeconomic is also another important part of economics today. On another hand, we may have to back to the old issue of macroeconomic control.

The suggestion I have are both domestic and international.

Domestic:

1. Put more money in medicare, education, Social Security, and some other places which can directly affect this and the next generation. As the baby boom and aging happened, the government must face it now or it will cause much more problems. This means higher payroll taxes.

2. Government should try some ways to decrease unemployment. To offer more jobs becomes an important issue today. Another thing that can be done is to offer some educational opportunities to the workers who lost their jobs. The cost of this option must be partly paid by government.

3. Taxes is another important aspect in economics. An income tax cut can help to increase consumption. Reassuring the consumers is the first step of stimulating consumption. A tax cut can also help medium and small-sized enterprises.

International:

1. Cooperation between other countries is obviously important during this period. China would be an excellent partner this time. The strategic economy development program between the United States and China could be a best way for both two countries to both expand..

2. The travel industry is another issue area for improved understanding and trust. International travellers help to stimulate consumption. To fetch in more and more tourists, government can put some money in basic transportation and famous places reconstructed, which can provide more jobs. Until we get to know each other, we find it challenging to trust each other.

3. Maximization use of education resources to attract more international students would help increase productivity and understanding. This is similar to increasing travel.

Work Cited

Bowman, Michael. “US Budget Deficit Expected to Hit Record.” NewsVOA.com. 28 July 2008. 19 Sep 2008.

<http://www.voanews.com/english/archive/2008-07/2008-07-28-voa41.cfm?CFID=40869757&CFTOKEN=42138815>

Educate the People

lperkins — Wed, 10 Dec 2008 20:45:35 -0500

Like most people I know I have never been concerned about the national debt. I knew that the debt existed; I just never thought it really affected me. The most I ever heard about the economy was what they said on the news, and to be honest, I normally changed the channel and even commercials were considered a better option. I never imagined that the world we live in could have changed so drastically in such a short amount of time.

The economic state of the world is very different than what I remember growing up. Many people are worried about the security of jobs and prices keep going up making it more difficult for families to make ends meet. Not only are people worried about keeping the jobs they have, many students are worried about their future. Many of them are going to school to achieve their “dream job” yet they now worry that they have wasted their time in class when they should have been getting work experience.

Many people that I know don’t have the time to worry about the nations finances when their own finances are in such a bad state. It seems like getting a credit card is a rite of passage when one turns eighteen, the second rite is digging oneself into a deep whole of debt. Many people in society live beyond their means, though I wouldn’t say it is sociably acceptable it is become more and more common. When it is so common for people to be in debt it is much easier to brush off the nation’s debt and continue with their lives.

Unfortunately, there seems to be no end in sight. I also am not sure what the solution is, or if there is a solution. I do think that education is the key to a solution. Until a few months ago I had no concern about the state of the nation’s finances. Once I started to learn about the basics I started gaining interest in the state of the economy. I believe that people should start learning about the finances of the nation at a much younger age. If economics was added to the curriculum in middle school or high school then more people would have a better idea about what is currently going on.

Without the knowledge of basic economics people do not fully understand what is happening in the economy. If the people were more educated then I believe a plan would emerge and it would be possible to put that plan into action. For that to happen people must know and understand what is going on in the economy. If more people were educated more people would care and if more people cared the government would not be able to ignore the nation’s debt.

Man on the Street 2: Facts and Figures

omalley835 — Wed, 10 Dec 2008 20:40:03 -0500

This is the second installment in a series of videos found on pound-it.org. It deals with the current fiscal crisis and tries to gauge how much knowledge people actually have on the issue.

Digging Out of the Economic Rut

mboydsto — Wed, 10 Dec 2008 20:37:25 -0500

When we think of the United States, we think of a land of opportunity and progress. However, recently our economy has been going through a downward spiral and is on its way to a national crisis. Most Americans were not concerned with this downward spiral until recently when inflation began taking over. As citizens started paying more for the same goods they had been buying all along, more and more Americans came to the realization that our economy is in need of a makeover. With the national debt rising exponentially, we as Americans need to understand the issue and come up with a plan of action to fix our mistakes.

The United States is one of the world’s leaders in Gross Domestic Product, yet it also has one of the highest national debt rates that is steadily increasing each and every day. Several people believe that just cutting back on spending will do the trick, but they are mistaken. In order to fix this epidemic we must take several steps forward. The first of these steps should be to obviously cut back on government spending. Each year our government spends needless amounts of money that could easily be saved back and put towards helping us get out of debt. If our nation would begin to live within our means, there would be a huge difference in the amount of money we had. However, this does not mean we cannot spend or borrow money in emergencies. We all know that there are cases in which it is imperative to borrow. If we keep our deficit to a minimum, it will dramatically help our economy reboot.

Another way for our country to save money would be to steadily end the war in Iraq. By sending a majority of our troops home, we would not only bring happiness to their family and loved ones, but we would be saving a small fortune. Every year a big chunk of our nation’s finances go towards national defense, and by putting ourselves into situations like those of the Middle East, we are just asking to spend more money. Yes, our nation needs to defend itself, but not at the expense of destroying our entire economy in the process.

In addition to cutting back on government spending, a slight increase in taxes would also be beneficial. I understand that no one likes paying taxes, but in order to bail ourselves out before it is too late, sacrifices must be made now. If each individual person had only a slight increase, there would be an enormous amount of extra money that could be put towards the economy in its time of need.

Not only would slightly raising taxes make a difference, but applying incentive programs to ensure that consumers are buying products would be a tremendous help. For example, this year when the holiday shopping season rolled around, several companies held giant sales and lowered interest rates in order to attract business. Incentive programs like this would convince consumers in our nation to spend their money instead of save it. Several people out there would jump at an opportunity to buy something at an incredibly low price now instead of waiting the economic slump out and buying when prices go back to normal. The money that would stay in circulation this way would only help our situation.

Furthermore, if we cut back on the compensation that the unemployed receive, we would be able to tuck a few more extra dollars back. I understand that there are people in our country that are unable to work, but I am sure that a majority of those citizens that are receiving unemployment checks in the mail could in all actuality get a job and work. We must face it, there are a lot of freeloaders in our nation, and in order to slowly get rid of them we must cut back on the funds that all unemployed citizens receive. This may not be fair to those who legitimately can not work, but in the end it will be better for our society.

Finally, the most controversial idea I have mentioned would be to save the social security fund for those who sincerely need it. Several elderly people are still willing and able to work and do not necessarily need their social security check until later on in their retirement. If we would use our social security funds for those elderly people who physically can not work any longer, there would be more money to go around for them. Some people might see this idea as unfair because there should be a set age to receive social security, but with the economy suffering like it is, we must take action. Also, by raising the retirement age slightly we could postpone the baby boomer retirement age until we have a few more things figured out within our economy.

Overall, there are several different methods that could be applied in order to better our economy and pull us out of the slump that we have gotten into. By applying just a few ideas to an overall plan, our economy could slowly grow until it is able to prosper again. We as Americans have a duty to our country to live up to our potential, and if we can pull ourselves out of this economic rut, we will once again be the land of opportunity and progress.

Our Government

Jeanann — Wed, 10 Dec 2008 19:57:17 -0500

Most people didn’t care about the economy, our government or the deficit until recently when prices started climbing up and factories started laying people off. I don’t think they cared about it because they didn’t know what it really meant. I will have to admit that I myself didn’t care about our economy either; it was because I didn’t know about it or how important it was to me personally. After doing a lot of research I learned the difference between the Public Debt and the budget. Public Debt is "real money" borrowed by The Public Debt a small part the U.S. treasury that borrows money needed to operate the federal government and to account for the resulting debt. Budget is a projection of what Congress intends to spend for any given budget year. It’s all on paper; so, having a budget surplus simply means that Congress spent less than what was projected for that particular budget year. If Congress overspends its projected budget then we have a Budget deficit; which is what we have now.

One if the biggest reasons I think we are in this shape is because this country doesn’t know how to live within its means. Starting on November 3, 2004 the Bush administration decided that it could not work within the budget that it had. They said they did not have enough money to run this country and would be out of borrowing money within two weeks so they put pressure on Congress to raise the debt ceiling. This is a limit set by Congress beyond which the national debt cannot rise; this is the maximum borrowing power that the governmental has. However Congress can periodically raise it if it chooses to do so and that’s what it did in 2004. The purpose of the debt ceiling is force the Government to stay within is spending range but what good does it do if Congress raises it whenever they Government complains they can’t make a budget with what they have.

The other biggest reason I feel that our debt keeps growing is the Iraq war. I feel that we do need to be over there. I don’t think we should just walk out on the people of Iraq either. The way we are going about it is not doing much good either. I’m sure the government has their reasons for continuing to stay in Iraq. It’s costing our citizens because we are being forced to be away from our fathers, mothers, sons, daughters, brothers or sisters. The loss of lives of our soldiers and families losing their loved one is the greatest cost of all. There is also the financial cost for us continuing the war in Iraq; a cost that is contributing to our country going farther and farther in debt every day. The money we are spending on the war could be spent getting us out of debt $215 billion is a lot of money and could make a nice payment toward our ever growing debt.

According to a new report from National Priorities Project (NPP), the United States is spending between $97 and $215 billion dollars annually on military action to defend access to oil and natural gas reserves around the globe. The Military Cost of Securing Energy provides a critical analysis of the military cost of defending U.S. energy concerns overseas. The report estimates that the military spends up to 30 percent of its annual budget to secure access to energy resources internationally (MSNBC).

I do not think that we should just walk out of Iraq and let them fend for themselves. I do think that we need to set a date that we will start pulling troops out of Iraq. Then, I think we need to do what we say we are going to do. I also don’t think it would be a good idea to pull them all out all at once but rather set a schedule as to how many of them will be coming homes at certain times and stick to it.

I have recently learned about the balanced budget constitutional amendment; it’s an amendment that was written into the U.S. Constitution by our founding fathers. We would need a national convention to propose a federal balanced budget constitutional amendment. The amendment states as follows

The Congress, whenever two thirds of both Houses shall deem it necessary, shall propose Amendments to this Constitution, or, on the Application of the Legislatures of two thirds of the several States, shall call a Convention for proposing Amendments, which, in either Case, shall be valid to all Intents and Purposes, as Part of this Constitution, when ratified by the Legislatures of three fourths of the several States, or by Conventions in three fourths thereof, as the one or the other Mode of Ratification may be proposed by the Congress; Provided that no Amendment which may be made prior to the Year One thousand eight hundred and eight shall in any Manner affect the first and fourth Clauses in the Ninth Section of the first Article; and that no State, without its Consent, shall be deprived of its equal Suffrage in the Senate(us).

I don’t know if this would work but I do believe this would take a lot of power away from the government itself. May if they were held accountable for what they do with our money they would be more careful with it.

http://www.msnbc.msn.com/id/15377059/

http://usgovinfo.about.com/blconar5.htm

Demolishing the Debt

Amy N — Wed, 10 Dec 2008 19:32:50 -0500

The United States has built up a tremendous amount of debt. Many American citizens do not understand why there is such a large debt or where it came from. Furthermore, they do not understand the harm it will cause to future generations. The citizens of America need to recognize the increasing problem of national debt and take action now.

Americans have all been warned to use credit wisely. When using a credit card for example, it is wise to pay off the bill as soon as possible so the interest does not add up. A person who charged $1,000 at six percent interest would owe $1,060. The next month rolls around and the bill is neglected so the person now owes $1123.60. The following month’s bill would then be $1191.02. After only three months, the person has to pay $191.02 more than what he or she originally spent. This example shows what poor credit decisions can do to one person. A similar concept applies to the government’s debt situation, but the government’s fiscal imbalance is extreme and growing.

The National debt has accumulated from government deficit after government deficit. Interest is added on to the debt and it increases even more. Then, interest is charged on the debt and the previous interest. This cycle continues and the debt multiplies faster and faster, digging the country deeper and deeper into a hole. The national debt is getting worse at an increasing rate and something needs to be done now so it does not continue this way.

The United States’ debt has been piling up for decades, because citizens are receiving more benefits than they fund through taxes. An excessive amount of the government spending and its promises that create benefits for Americans of the last generation will be financed by this generation; the debt plus the interest are being pushed to this younger generation. If action is not taken now, the younger generation may think it is alright to shift even more debt onto their children. Along the way we will face loosing good government programs, paying much higher taxes, or both. The debt needs to be paid off so that this generation’s children do not lose benefits from the government such as public schools. The problem must be fixed before it becomes very damaging.

The first step to fighting the United States debt is to make it a national priority. The President, and congressional representatives all must understand the situation and address the sacrifices we must make. The legislators need to realize that their actions can sometimes benefit people now but cause great harm to future taxpayers. Debt elimination must be a high priority. Instead of postponing the debt payments, some government programs and spending will have to be postponed. The government will have to “tighten its belt” as some would say.

The public also needs to be made aware of the situation and how it will affect them. It should not cost much to educate most citizens. The debt problem can easily be explained in terms most Americans can understand. It is similar to a person running up a huge credit card bill all of his life and then giving it to his children to pay off entirely on their own. This would put the dilemma into an understandable perspective. Then, the real consequence and solutions could be presented to the citizens. One point that especially needs to be stressed is why lowering taxes leads to a bigger deficit. When Americans understand this, they will hopefully put less pressure on politicians to lower taxes. Then, the politicians and lawmakers can place a higher priority on debt reduction instead of lowering taxes.

The United States cannot clear the debt overnight. It will have to be paid off slowly, but slowly is better than not at all. To eliminate debt the government budget needs to have a surplus instead of a deficit. One way to achieve a surplus is to have an increase in taxes. Most of the government budget comes from personal and payroll taxes, so this is the easiest way to get more funds. The government will then use the surplus money towards the debt. Taxpayers need to be aware that they are going to have to pay more taxes in order to get more benefits from the government. The country’s current debt is partially due to citizens receiving more benefits than the amount they pay in taxes.

If taxes are increased, people may have a slightly lower standard of living than they experienced previously. Doing this voluntarily would be much better than being forced to by an intense economic recession or collapse that could result from too much national debt. The President and Congress should set an example for United States and the rest of the world. They should cut back on frivolous spending and fancy objects. This act would show the American people, that eliminating national debt really is a priority and that these legislators can be trusted with the taxpayers’ money.

The citizens of America need to recognize the problem of national debt and take action now. Once the problem is recognized, it can become a national priority and plans can be implemented. The longer this problem is pushed to the side, the harder it will be to overcome. If the country does not demolish the mentality that created this debt, then the debt may demolish this country.

Facing the Future

mpannbac — Wed, 10 Dec 2008 19:20:27 -0500

As I sat through my morning classes today, I looked around the room at my fellow classmates. Some will be future doctors, lawyers, business owners, teachers, accountants or entrepreneurs. However, as America’s fiscal crisis becomes increasingly critical for all sectors of our society, I look around the room and see my fellow classmates facing the possibility of no job offers at graduation.

The subprime mortgage crisis and the recession we are in have made for the most worrisome economic times in decades. What does that mean to me and my peers? It means that I may not have a job when I graduate from college. Not having a job will not be because I am not qualified or not able to perform the tasks, it will be because those in my field either are sticking around longer than expected because they have lost the money they planned on having for retirement, or simply that jobs have been eliminated because of budget cuts. This goes for everyone in the job market. Companies and employers are cutting back and tightening their belts because of the financial markets and their own financial situations.

These difficult economic times may go on for several years. Several economists suggest that we haven’t hit the bottom yet, and recovery will take a longer, as opposed to shorter, amount of time.

One of the discouraging things about this crisis is the greed and stupidity that fueled it. Americans were spending money they didn’t have and buying homes they couldn’t afford. Lending institutions were making housing loans to people who couldn’t make the payments.

In an article from The Heritage Foundation, written by Ronald Utt, Ph. D., Utt referred to how the Congressional Research Service listed these characteristics of borrowers who might qualify for a subprime mortgage:

*Being behind on bill payment by 30 to 60 days.

*Judgment, foreclosure, repossession or charge-off within the last two years,

*Bankruptcy in the last five years.

*High probability of default

*And limited ability to cover living expenses after debts.

Yes, everyone has a dream to have their own home, but buyers and lenders need to be realistic. Lenders began to use mortgage products with a class of lenders that made them risky – probably more risky than many realized. People were purchasing homes they couldn’t realistically afford, and lenders were making loans that should never have been made.

Another big problem is the cost of energy. One of the biggest reasons for the increased cost of food is the transportation costs to produce and deliver it. Americans are energy hogs. We must decrease our dependence on foreign oil. We need to promote and reward conservation, and we have to develop alternative energy sources that are realistic and practical, not overly idealistic.

Skyrocketing health care costs are causing problems for pension funds and employers who provide health insurance as a benefit.

America’s national debt is frightening. The costs of the war in Iraq and Afghanistan have fueled this debt, and severely compromised our nation’s financial strength. And, all of this comes in a global economy where countries with large populations can produce goods more inexpensively because employees will work for a lower wage.

As the United States continues to deal with the national debt, housing crisis and the recession, things are going to get worse before they get better. President-elect Barack Obama has a huge mountain to climb during his presidency. He will need to balance calls for increased government regulation and increased federal spending with doing what needs to be done to fuel economic recovery. He will need to help boost confidence in Americans and their economy so people will look at spending money and making investments, as opposed to sitting tight and cutting personal spending. He will need to find a way to keep college available and affordable. What will happen to my peers who are seeing student loan opportunities dry up and face the reality of graduating with heavy debt loads and no jobs at graduation?

The government can’t and shouldn’t bail out everyone, but what is different this time is the interconnectedness of everything. One of the best things to happen that could happen to all of us is to get lean and mean again, so we know what things actually cost and how we will pay for them as opposed to wanting something and going out to buy it with a credit card.

We need to start with a blank slate on every federal and state program. Just because we have always done something doesn’t mean we should continue. Social Security might be a good example. It is only considered actuarially sound until the 2020s. The number of people paying in is going to be far fewer than those who receive payments. It is likely that I will never see a Social Security payment. Just because we’ve done it for a long time doesn’t mean it is a program we should continue.

The crisis demands that we all look at our budgets and our spending. Being efficient and forward-thinking applies to all of us, from me the student to the largest corporation. By taking action now, we can prevent the crisis from dragging on and making the situation worse. But in order to do this, we as a country need to get our act together.

Work Cited

Utt, Ronald D, Ph. D.. “The Subprime Mortgage Market Collapse: A Primer on the Causes and Possible Solutions.” 22 April, 2008. The Heritage Foundation. http://www.heritage.org

/research/economy/bg2127.cfm

Finances: What Do We Do Now?

MeganB — Wed, 10 Dec 2008 18:26:23 -0500

I can remember years ago when the crop markets hit an all-time low. My dad, who has been a farmer his entire life said the government was starting to get careless and as providers for this country, we really need to start pinching pennies because farmers are the ones who will be hit first. From January 2008 to September 2008, fertilizer prices hit an all-time high. We had to cut back on fertilizer, the amount of seed we plant per acre, and we went to the no-till method because it requires less fuel. So far, my dad’s farming corporation is still floating. If farmers, the people who work seven days a week, 16 hours a day, 365 days a year, can find ways to cut corners, why can’t our government?

This past year, my hometown voted on a $29 million school bond twice (once in the last fiscal year and once in November) and each time it didn’t pass. My hometown, Herington, has a population of 2,421 (as of 2007; see the link at the bottom of this essay). Considering over half of the population has retired or is on welfare, obviously the town couldn’t handle the tax increase considering we just built a new overpass. Therefore, if the towns people couldn’t afford the increase, the farmers who have property in that school district would have to pick up the slack. Can farmers afford this increase? Of course not! Therefore, I propose, in order to protect the farmers, we turn our schools into schools that have tuition (ex. Emporia State University, Kansas State University) to help support the much needed updates without wiping out all of our farmers. All students are granted the right to a free and appropriate education, but right now, we can’t afford free. Everybody needs to pitch in!

After looking at the facing up website, it was rather frightening to see how far we, as a nation, have plunged into debt! How do we get out of this hole? My proposal is everyone should have the same tax rate. The poor should not be taxed more, or the rich taxed less as a percentage of their income; otherwise, the gap between classes will continue to grow. If everyone was taxed at the same rate, America may be able to pull themselves out of a recession at a quicker rate.

Another cut we can make is in some welfare programs. Rather than let people make a career out of sitting at home and receiving paychecks each month, why not give everybody a total of six months of assistance that they can use whenever they need it? In my home town, some people use welfare assistance as an easy way out. They apply for jobs like they are required to, but present themselves in an inappropriate manner so nobody will want to hire them. It was also brought to my attention that the more kids you have the higher amount you get each month. This appears as more of an incentive to be on welfare rather than to try to stay off of it. I understand we want to try and help people who are going through a rough time in their life, but at the same time, helping is one thing, supporting them is another. I had to laugh at my last meeting with my financial aide advisor when I attended Washburn University because I make more money per year than most people my age so her advice to me so I could get more aide each semester was either quit my job or have a child. I chose to ignore her advice because I am able to support myself and I take pride in that. Why would I want to take the easy way out just to get a cheaper education?

As a nation, I feel like we could make more sacrifices and if we would help each other rather than be selfish and inconsiderate of others, then we wouldn’t even be in this situation. Yes, that means giving up our private jets and going to the world’s hottest vacation places to hold our company meetings. We need to stop shifting the burden of this generations finance issues to next.

I feel that if we start sacrificing the things we don’t need and helping others, change some of our welfare policies, and have equal taxes, we will be able to get out of this recession and move on without carrying all of the burdens of this generation to the next.

http://factfinder.census.gov/servlet/DTTable?_bm=y&-context=dt&-ds_name=PEP_2007_EST&-mt_name=PEP_2007_EST_G2007_T001&-mt_name=PEP_2007_EST_G2007_T002&-CONTEXT=dt&-tree_id=807&-all_geo_types=N&-geo_id=16000US2031400&-search_results=16000US2031400&-format=&-_lang=en

Nation's Finances

swortwood — Wed, 10 Dec 2008 18:22:06 -0500

The United States economy is in for a harsh reality in the following months. The damage has already been done. The older generations failed to live below their means, now this generation has to suffer from their actions. A trillion dollars is a great deal of money that is difficult to grasp. Most Americans go about their daily lives, not thinking once about the national debt. Which is a good thing, because if they were to they might put back the latest in plasma screen televisions they were planning to put on their credit card. Not every person would stop what they were doing and immediately change their perspective on things.

As interest rates soar higher and higher the ones hit hardest by it are people trying to get loans. This means in the future it is likely that a person might have to have up to half the money upfront for an automobile or house. This might take awhile to happen, if it ever does, but if it did it would take a normal person living right above poverty level 10 years to put back the money to successfully receive a loan. The United States government has been borrowing money for the past century and it about that time to pay the piper.

Our grandparents are having to work longer into their retirement for the sake of living in their own houses. It's scary to think that myself and my children might not be fortunate enough to settle down and retire. We might eventually end up coming full circle from the days where people worked until the day they die. Most people would like to settle down and collect their retirement check until they die, but the way things are looking not many people are going to be able to.

The issue of tax rates is also a crippling subject. In my parents lifetime they have witnessed tax rates go up almost 400 percent. By the year 2040 it's suspected to exceed the limit tenfold. This will cause a dramatic change in our society, the likes of us can't even imagine. The government will have to introduce new taxes for the deficit they have caused.

Health care is another thing that is subject to change in my generation. There are other countries with universal health care. For such an advanced society we have many people who aren't able to afford the latest in advancements in the field of health science our country has to offer. It's looking like it can only get worse from here. If the government supplied the money for the whole country's health care it would do one of two things; drives us further into debt, or be a blessing.

If I were going to support any reforms to these matters I would give the whole country universal health care. So that all Americans could receive proper health care. People wouldn't have to worry about paying hospital bills. They would then be able to pour that money back into the economy. I would also implement a ceiling tax on all domestic goods. Which would in turn steer people more towards buying domestic supplies, thus putting more money into the domestic economy. I would also raise the minimum wage to ten dollars. Also I would propose that higher education were more affordable than it is. Having attended college for sometime now, I have yet to pay any of my loans off, but I know they're going to be severe. If college were more affordable less people would be discouraged to attend. Another good idea for lowering the national debt would be to start paying it off. It's as simple as it sounds, start paying it off! Instead of giving GM, Ford, and Chrysler 15 billion dollars, put that money towards our national debt. That might be easier said than done, the point is to try and reduce something that is forever growing. I would also do away with well fare. If a person is physically able to work, they shouldn't be eligible for assistance.

I'm not an expert in economics, but if I were to offer any advice to this problem of the national debt I would just advise people to live below their means. Also, for people to use their credit cards responsibly. If people spend money they don't have yet, then they will keep working week to week trying to pay off the money they spent when they didn't have it yet. These are just a few ideas. If they can assist in any way I'd be flattered.

The Fiscal Future? who cares!

lizshenk — Wed, 10 Dec 2008 17:58:23 -0500

There are an awful lot of rumors flying around about the National Debt that our country is falling into. Almost everywhere I go people are throwing out their personal opinion about what our government could be doing better to bail us all out of this jam. I’ve heard that this is the worst it’s been since the depression, and that things will continue in their downward spiral toward doom. Students in my earlier class just today were talking about their own personal debt, someone had read that about eighty percent of American citizen’s personal debt is not due to living outside of their means, but to unapid medical bills that they don’t have the financial backing to take care of. Most of our debt was related to credit cards and student loans.

I should probably be paying a lot more mind to exactly what is going on in our country today, I never registered to vote, or even bothered to watch any of the debates for the presidency. I think maybe I have a hard time being interested in it all because of the fact that it just plain doesn’t matter how interested I am, there’s nothing my vote could do to make Kansas a democratic state, just like there’s nothing I can come up with on how to pull our country out of this huge hole of debt that we’ve apparently tripped into. All I can do is criticize and grumble.

Although America has elected President Barak Obama without my help, I agree with their decision. The only thing that’s going to turn this ugly situation around is change. Whether or not this change will be what we need to get back on the right track, I don’t know. But it’s gotten George Bush out of office, so that has got to be a start to something new. My own dad shares in the republican belief that what’s mine is mine, and yours is yours, I shouldn’t have to share my hard-earned money with anyone else, whether they’re falling drastically behind or not. I love my dad, but how is that opinion going to help our rapidly deteriorating situation? There’s going to have to be some distribution going on somewhere, or we’ll just keep pulling money out of thin air and creating a bigger sink-hole. Perhaps Obama will be capable of making the changes necessary to fix the problems we have, and turn our economy into a flourishing one.

Seemingly, in my unfortunately uneducated opinion, America has had a turn around stage after most of the wars we get ourselves into, so If someone more involved than I can figure out a way to get our troops back home where they belong without cramming any more of our inflated freedom beliefs down Iraqui throats, we might be able to get ourselves turned back around where we belong and focus on our own problems. Like educating bored, lazy students like myself who have virtually no clue what is going on in the world outside of Emporia.

As I mentioned earlier, we have seemed to pull ourselves up for air again after most wars in a sense, and I think in about eight years or less, we’ll repeat the same feat and do it again, it’s just an inopportune time for my peers and I to be entering the work force with the economy already in the tubes. As an art major, I should be more worried and up to date on what the heck I’ll do as a career after I’m done racking up more college related bills, because my options are certainly not endless. I’ll be entering the real world with tons of loans to pay, and no substantial wage to offer. This seemed to be the issue for most of my classmates too, who have stronger opinions on the state of affairs than I.

I am fully proficient at making a complaint about how this will personally effect me, as far as being able to pay off my loans and such. But as far as offering a significant solution to the problem, I’m worthless. Maybe the bigger problem is that there is an army of Americans just like me, who don’t know or care enough about the fiscal future of our own country. I don’t think I’m the only one who’s gotten comfortable in the belief that I’ll be taken care of by my government, and that things will just go on without me worrying about the important matters at hand. Personally, I haven’t met another Emporia State student yet who can tell me something I don’t know about bailing us out of this mess we’re in. As a whole, we’ll probably just keep running our credit card bills up at the local bars, and enjoying our christmas break with the fiscal future very far from our minds.