STUDENTS: NEWSFEED

It's Up to Us

kelsey.a.ryan — Sat, 12 Dec 2009 05:57:43 -0500

Emporia State University students set out to find how locals feel about the national debt and how the problem can be fixed.

This is my opinion.

sayaka sensui — Sat, 12 Dec 2009 00:56:08 -0500

The United States have 12.1 trillion dollar of national debt this year. It has been increasing from 1970. The federal debt has never decreased. The problem will probably be carried over to the next generation. Now, we need to reconsider about it.

Social Security, National defense and Medicare, these categories hold the most significant part of the budget of the United States. First, we have to look over again very carefully which budget could be curtailed. However, the population of America is heading to an aging society. It will involve a more outlay for health care.

How do we resolve the problem? In my opinion, we extremely need to raise the employment rate. The unemployment rate in the Unites States for 2009 is over 10 percent. It has been remarkably higher from 2000 to 2009. Higher education is very important to decrease the unemployment of rate. The compulsory education should improve for people who could more easily take a higher education. People who are employed more increase; it will more procure funds for the budget of the Unites States.

As I mention before, the United States is heading an aging society. We should suppose to have more young people than old people for supporting health care for every old people take the service. So, the government should provide better situation for child to increase young population.

This is my real opinion. If the all of the world would be peace, we could undoubtedly reduce the budget of National defense. I hope this is the best of opinion.

Will there be a light at the end of this crisis?

Marie Fisackerly — Sat, 12 Dec 2009 00:02:09 -0500

Will there be a light at the end of this crisis?

The Nation's federal budget is constantly changing. The United States will most likely never recover from the debt they are currently in. The economy is struggling and many Americans can not keep up. The United States continuously tries to help its allies and other countries, while we fail to help ourselves. If the nation can not provide for itself, then what good is it doing?

I feel the government needs to take a step back and look at the reality of the situation the U.S. is in. They need to come up with a way the big businessmen and wealthy can help those in poverty. It is ridiculous how many people suffer in this nation due to a lack of the government's regulations. Our budget needs to implement more education and healthcare, and cut back on military costs. I understand the world is in war right now and America has been threatened, but millions of dollars and lives have been wasted due to the poor decision making of those in government. When will enough be enough? America is one of the most underprivileged countries and looked down upon by others.

I feel like we have turned into a country that strives to be the most powerful and feared. Our president claims he will make a change, but will he be capable of making America as successful and great as it once was? He can not do it on his own, it takes help and sacrifice from everyone. Even me, as a citizen I have the responsibility of trying to make this country better by not breaking the law and giving generously to others in need when I can. Can you look at yourself and say you honestly try to help make this world better? If you can not then how can you expect it to change. I believe if you expect change, you have to first change yourself. If those in government can not look past their own needs and wants then this country will continue to suffer.

Some other ideas for helping the budget are to not give so much excess welfare to those who have no use for it and to cut back on spending to care for people that break the law. Many people receive things like food stamps and free daycare when they can not even put it to good use. The government just throws something at the less fornunate in an attempt to get them to shut up and leave them alone. If they tried to listen occasionally they could actually improve many people’s situations. Also if the government was not so quick just to throw everyone who breaks a law in jail, but to make them pay for their mistakes and not hold the taxpayers in this country accountable. I know how it feels to have a family member in jail, my mom was there and it is the hardest thing in my life I have had to deal with. It is not fair those who do the right thing should have to suffer for those who do wrong and get to set around and watch the world go by. They should have to pay their own debt off and help society instead of staying locked up in a room.

After all this, I do think our budget will get better. It could take decades, but the economy will be at its worst before it bounces back. Things like the unemployment rate will recover and the families struggling to make it by will pull through. Americans are strong individuals and I have full confidence our government will turn around and become a better institution.

One Trillion and Climbing

jennafugate — Fri, 11 Dec 2009 23:14:51 -0500

During our current recession, the federal government’s huge deficit has increasingly been under a microscope; however, the deficit should not be the most important concern. In my opinion, the increase in the deficit is to be expected and it is appropriate because of the actions the government has taken to try to turn around the economy. The state of our weak economy is the main concern along with the immediate action we need to come out of the recession. It will take many years to get out from under this debt.

The high deficits that have continued for long periods of time will do damage; it should be common sense that trillion dollar deficits are a problem. Our government’s continuous borrowing of large amounts can produce inflation, decrease housing investment, lower future incomes, and raise interest rates. As we have seen before, these can harm the economy and the people. As worker’s wages cannot keep up with rising costs, it is difficult or impossible to afford many things including the purchase of a home. However, it is just as difficult for the government to pass any sort of necessary public programs when there are such large deficits and debt hovering over the budget process.

The Congressional Budget Office and the Office of Management and Budget both project high deficits through 2019. Many people think the budget can be reduced through spending cuts alone. I do not agree. We would have to slash spending everywhere dramatically to see any changes. However, we cannot slash spending alone. We also have to raise taxes given the size of these problems.

I do not believe it is realistic to think we can cut spending in all areas. Some areas would have to be spared, which obviously means that the cuts in the other areas would have to be deeper than others. For example, one option to help cut spending from the budget is to cut or eliminate Social Security for future generations; I hope for our sake there is a similar plan to take its place if this occurs. Similarly, cutting or eliminating funds for health care could be considered in the United States if we plan to reform. If we take Medicare out of the picture along with Social Security, the projected deficits and national debt would diminish; however the consequences are almost unimaginable.

Another main thing we need to consider is the impact of the wars in Afghanistan and Iraq. Bringing the troops home and pulling funds out of defense spending would begin saving a substantial amount of money. I’m afraid the rest of the budget cuts in schools, health clinics, highways, food safety and regulations, and other important things like that would be devastating especially if slashing spending is the only road we take to reduce the debt.

We have to raise revenue to balancing the budget. “I don’t think there’s an economist in the United States that thinks when you’re trying to get out of a recession and to create jobs, you ought to raise taxes,” said a Mississippi Governor Haley Barbour, a Republican. I know many have that same reaction when raising revenue is considered, but if we do increase taxes on those who have the extra income, it seems like the only other way we can accomplish a balanced budget.

The federal government would have to collect a very large amount of money from taxing everyone to make even a dent in the deficit. I believe if we have moderate spending cuts along with an increase in taxes to families making more than $500,000 a year we could eventually reduce the debt problem in the United States.

Regardless of whether or not the solutions I have proposed in this essay would actually create a change in the economy or not, unnecessary government spending is going to affect everyone in the United States for many years to come. The choices the government makes to take on this problem will have an impact on students, families, and the elderly. Solving this problem will in no way be easy, but the longer we wait without any change, the worse it will get. It is important that we use care in this balanced approach so that the solution will not make the problem worse. The sooner we recognize this, the sooner we will be on the path to a solution. Acting as if it is not essential to solve this problem, or that it is too big and difficult, will not get us where we need to be.

Zip-Diddly-Squat

Kyle Dasenbrock — Fri, 11 Dec 2009 22:56:33 -0500

Everyone in every town of every state is asking one question, “What are we going to do about the national crisis?” Everybody and their dog is freaking out because they fear we will be headed toward another Great Depression. It seems as though every time our government tries to bring our country out of debt, it only gets worse. We are supposed to be a capitalist nation, which can mean that we can bring ourselves out of debt by letting the market be. So what do we do? Nothing. I will explain.

For most of this essay, I will be talking about bailing out banks that we have all heard of and have seen on the news. What exactly goes on in a bank bailout? When the government or the Federal Reserve sees that a bank has debts that it cannot necessarily pay off, it will buy mortgages backed securities that are in danger of defaulting. Here is the major issue I have: the banks that were bailed out are too big to fail. Unless someone from the bank purposely mishandles funds for the sake of their own benefit, such as what happened with Kenneth Lay and other employees that worked for Enron, the large banks will be ok to stand on their own.

There are a few main problems with bailouts. The first one is that large banks are anticipating that the government will step in and help them out of a crisis when it is necessary. This can cause a couple of problems. One of them is that the banks can become so heavily reliant on the government that it is likely that the bank itself will not try to save itself. Secondly, with this anticipation, it can warp the amount and pricing of funding that creditors will provide to a bank that is too big to fail. This can lead to the bank taking excessive risks and can make poor use of their financial capital.

Another problem is that banks have now become too large and complex. This definitely makes it more difficult for policy makers to predict fallout from banks and will refuse to provide good enough coverage to uninsured creditors. Yes, the banks these are very large and very complex, which is why bailout money is not needed. Especially since we know that giving bailout money may not be so great in the long run. Yes, it does stop people from freaking out at the time the too large to fail bank might close, but it just increase our budget deficit that people of our generation will have to pay for in the near future.
One more major issue on the bailouts is that people who work for failing banks get away with millions of dollars for supposedly doing their job, when it was their fault the bank was failing in the first place. Incentives for the executives? Give me a break. Talk about creating a deficit…wow.

I have addressed many problems, and I bet you are asking yourselves, “When is this rambler going to get to the issue on how to solve the crisis that we have?” I should not have to say it, because I myself think it is pretty self explanatory. We are supposed to be a capitalist country, which means having a free market with very little government control. Therein lies the problem; our government is doing too much. That was indeed my entire point of talking about bailouts. Everyone is asking the question, “What should we do? What can we do to pull ourselves out of the situation?”

The answer to those questions is plain and simple: nothing. Let me clarify what I mean by nothing; the government needs to stop helping banks and needs to allow the market to run itself. Our country has led the economic world for years because of the free market economy system that we have. Once a bank or a business fails, a new and upcoming bank or business will take its place. That is how it has been, and without a doubt, how it should be. Banks that are too big to fail need to be left alone. Sure, every bank and business will fluctuate and look somewhat bad at some point, but the banks that are too big to fail will either correct themselves or the market will punish them.

Bailouts are not at all needed and our government needs to step out of the way and allow the market to act on its own. It seems like every time our economy looks better, our government steps in and tries to help, but only makes it worse. So, from now on, when someone on T.V., radio show, or even a press conference asks the question, “What are we going to do?” Everyone should say and agree, “Make the government step out of the way. They should let our economy go as a free market, and do zip-diddly-squat.”

Work Cited

“Too Big To Fail: The Hazards of Bank Bailouts.” Mineapolisfed.org. December, 2003.
http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=335...

I am Recession proof

Addison Canidy — Fri, 11 Dec 2009 22:17:58 -0500

I know why America is not recession proof. It’s because we the people that make up America are not good stewards of our money. There has been an over whelming flux of “recession talk” the past couple years. However I believe that I am not a participant of the recession of America because I have positioned myself to not be affected by this nation’s situation. I believe that if the American people were good stewards of money this would be the ideal time to buy the things that could establish their lives and walk in the American Dream. For example we have seen a major decrease in real estate and automobile prices that have been downright shocking. When thinking about it, if we as a nation would have saved our money and sacrificed what we wanted a few years back we would be able to get everything we wanted as a product of this recession.

I believe that this should be a wakeup call to all Americans that nothing is guaranteed to us, and that we should begin to understand that not even the most powerful nation in the world is a sure thing. Our money should be working for us right now and not us working for money. There has been an influx of home foreclosures and if people were handling their money correctly all the foreclosures would be occupied by the people that have done so. People expect their salaries to go up in order for them to be able to buy a dream house but we are now in a time were salaries have not went up but the prices of things has went down. People have depended on jobs, 401k’s, stocks and bonds and all of the government systems and everyone has forgotten to depend on themselves to become recession proof.

Uh Oh, Uncle Sam

rzim88 — Fri, 11 Dec 2009 21:57:02 -0500

Did they make a mistake when writing the Constitution? According to the Constitution of the United States, Article I, Section 8: The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States; To borrow money on the credit of the United States…” The Constitution states it, for the general welfare of the United States. If they knew what would unfold, would they have allowed the borrowing we see today? Is Congress doing its job? Is it taking care of the general welfare of U.S. citizens? Is it providing for our defense right now?

As a college student, I am worried about our nation’s future. I think about where the economy will be in fifteen years and what my generation and my children’s generation, and possibly my grandchildren’s generation, will have to fix because of the decisions our government is making today. Our country is currently $12 trillion dollars in debt. That is outrageous! I don’t even know how much that is exactly, but I know it’s a lot.

I am an elementary education major, and I’m really worried about my future as a teacher. Will I have a job? If I do, will I have the funding I need to adequately teach students? Will I need at least one other job to support my job as a teacher so that my students can have the supplies they need for projects and experiments? As a future educator, these are just a few of the problems I face. Schools around my hometown are closing down due to a lack of funding. They don’t have the money for books, art education, music education, or even the money for students’ meals.

Education should be top priority for all levels of government because it’s the future of our country who is sitting in the classrooms. Without a strong education, students won’t be prepared to go to college or enter the work force; they need these skills to succeed. I’ve talked to a few people, mostly family members, and they all said they would be willing to pay higher taxes if it went to education.

It is really important that our government act now to try and pay off some of our nation’s debt, because when the baby boomers hit retirement age, it’s going to get ugly. It will be my generation’s responsibility to make sure all of the baby boomers are taken care of, which means taxes will be taken out of my paycheck to take care of them using programs like Social Security and Medicare. That’s fine, I have no problem with that because the baby boomers include my parents and aunts and uncles, but what about when I’m ready to retire? Will I be able to retire around the age of 65? Probably not because these programs are funded by current workers. I am not trying to be pessimistic but I don’t really see that happening with what my generation will have to pay in taxes to correct the mistakes happening now. Even if I try to put enough of my own money away, it still does not seem possible. With all levels of government cutting education funding, I do not see a bright future, unless the government changes.

I’m not only worried about how this budget deficit will affect me in the future because it’s affecting me now. I work at a daycare center. There are three centers, two of them are combining because they don’t have the money to feed their kids or pay their staff. Enrollment is down because they had to raise their prices because minimum wage increased and a lot of parents pulled their children out of daycare. When these two centers combine, I don’t know if I’ll have a job.

These are desperate times, and desperate times call for drastic measures. The President, Vice President, and Congress need to sit down and figure things out. They need to get their priorities straight. Does all the money really need to go to the war right now, or are there places where they can take some away? They also need to plan a balanced budget and STICK to it, just like I have to stick to a budget. If millions of Americans can do it, including me, so can the government. If they don’t need to borrow, if they can get by on what they have, then do it.

While reading the Heritage Foundation’s: Federal Spending by the Numbers, I got heated. It is absolutely ridiculous what our government spends on unnecessary things! Does the President not see where money is being spent? Members of Congress have spent hundreds of thousands of taxpayer dollars on items for their offices, such as popcorn machines, plasma televisions, DVD equipment, among other items they do not need. If they have these things in their office then they are not doing their job! I do not want my hard earned money to go to supply their extravagant spending. Money being thrown out the window because the Defense Department never bothered to get a refund on unused flight tickets totaling $100 million. Congress appropriated $20 billion to be spent on “commemoration of success” celebrations related to Iraq and Afghanistan. ”Over half of all farm subsidies go to corporate farms with an average household income of $200,000.”

After reading all of this information, I am tempted to march to Washington and get in Congress’ face and ask them if they like sitting around doing nothing watching DVD’s on their plasma televisions when our country is in a crisis. It upsets me to think the money that I’ve earned is providing things to people who are very well off. All of this wasted money should be put to use, put towards programs we all rely on and need.

Product Distribution Revised

Harrison Stone — Fri, 11 Dec 2009 20:40:48 -0500

The economy has suffered a massive deficit of over 3 trillion dollars on the last few years. The most logical task for getting our economy out of debt is to increase a tax and stop borrowing money from other countries. How many of you consumers notice the extra cents off the next whole dollar you don’t spend on every purchase? My plan can be considered a tax raise but it is not a set tax increase, it can be different for every purchase, and you will never be charged an extra dollar on your purchase. My proposal is simple, not to say people will not be upset with it but most people will not even notice it. My proposal is actually used in a different manner in today’s society. There is a credit card, I believe it is Chase TM, that takes the difference of your purchase and the next whole dollar, rounded up, and moves it to a savings account through Chase TM. I figured we could use the same concept except apply it to every purchase/transaction made in the United States every year.

An example of my proposal in action is a college student craves a late night snack and decides to drive through a local but anonymous fast food restaurant. After ordering a combo meal the cashier tells the customer the total is $5.28. Instead of having the 28/¬100 of a dollar, my proposal will round up to the next whole dollar. Instead, the total would be $6 even and the 72 cents collected will go straight to the government. I call this plan the “Whole Dollar Solution.” This proposal will be use on every single transaction in the country. Granted, some purchases would amount to $5.99 and the government would only collect one cent but if this proposal was used on every single purchase then the government could collect a lot of extra money from the population.

Most of the general population would not notice this occurring very often, especially if they buy a lot of goods in one purchase. Let’s say an individual buys groceries that total to $204.56. The total would then be rung up as $205 and that extra money would be collected, but the consumer would not be very affected by it. This could also make the financial lives of the consumers easier because they are balancing their bank accounts with whole dollar amounts. This would eliminate many arithmetic errors made while balancing one’s bank account and possible decrease the amount of overdrafts by bank account holders.

This is an incalculable amount of money since there is no easy way of tracking every purchase of last year and figuring out how much money that is potentially there to collect and help out our deficit. But if one individual made 20 purchases in one week, averaging 10 cents a purchase, then from that one individual the government would collect two dollars that week. Use that average for the entire year, 52 weeks multiplied by the 2 dollars, the government would collect 104 dollars from this one individual in one year. There are more than 304 million people currently registered and residing in the United States. Here is where the money kicks in, 304 million people with the same average as the previously mentioned individual will total in over 31 billion dollars in one year. This amount is entirely hypothesized and has no credibility of truth but it is a reasonable number for calculations.

This proposal can accumulate a very large sum of money to put towards the national debt. The example above only counts the citizens in this country that are actually registered by the U.S. Census, which we all know is not all of the people in this nation. It also does not count the tourism that America experiences because their purchases as well would count toward our collections. Quite honestly the average of ten cents per purchase is low considering how many transactions are currently within ten cents of a dollar before tax. I believe that an average of 30 cents is more reasonable but I was just making an example. Just for my satisfaction I ran the same math as the previous example, only using the 30 cent average instead of the 10 cents. After calculating this, the sum of money for one entire year would be over 94 billion dollars.

There are a few objections to this proposal that I can imagine but the solutions simple. There are many things in this economy that cost 99 cents. So instead of paying $1.06 for an item you would have to pay two whole dollars for it. Now there would have to be a few clauses put into action that would eliminate this anomaly. We would have to just regulate cooperation’s resale prices by illegalizing the price of anything that close the dollar, up to five dollars. Example: an item cannot cost $4.99; however, it can cost $5.99. This clause insures that you will not be ridiculously overcharged for something so low in price. Instead, these items costing less than $4.99 before taxes must be set back to an amount that will not exceed the next dollar amount after taxes set in. Example: an item that was originally $4.99 must be cut back to $4.59

This plan of action I feel is reasonable and effective. It doesn't take a whole lot of money from each individual at one time but using the vast population of our country instead. Granted, my proposal would not solve our deficit in one year or even 5 but at this point the economy needs all the help it can get. I believe my plan is simple enough to be used without a large grace period needed to get the general population familiar with the process. I understand there are many intelligent solutions being proposed, but sometimes simplicity is the best solution.

A Japanese Vision of the American Dream

htakami — Fri, 11 Dec 2009 19:42:06 -0500

As a non-traditional student from Japan, it would be easy to say to America, just follow Japan. However, Japan has many difficulties which are similar to the ones facing the United States. The fatal day of financial capitalism suddenly arrived on September 15, 2008. Lehman Brothers in the United States collapsed with it debt; this “Lehman’s shock” still startles the world. Japan had a similar financial challenge, and Japan needed over 10 years to recover from bubble’s heavy burst. According to Naotake Kato, professor emeritus in Japan: the idea that injection of taxpayers’ money will make effective demand big; this fires up business from the inside. He thinks this is lack of foresight of the United States. He says the Unites States needs a long-term plan for 20 years at least.

According to the data of the Cabinet Office in Japan, advanced countries like the United States and Japan continued to have negative growth and the drop in GDP was big during the first three quarters in 2009. On the other hand, developing countries like China and India had a decrease the growth of GDP, but they did not into fall negative territory. This seems to indicate that the relation of the United States and Japan is very tight, and Japan is influenced by the United States strongly.

The United States has been borrowing to buy goods through the trade with foreign countries. Namely, they had been made up trade deficit (i.e., importing more than exporting) by borrowing. Foreign countries needing to invest buy U.S. government bonds and other financial things.

Unfortunately, a solution of overcoming this recession is still unclear. However, economics seems suggest, the United States government seems like misunderstanding the meaning of words “American Dream”. The people in the United States might change this way of thinking. It does not mean only the nation’s list of top 1 percent enjoy the benefits brought about by an advanced economy. Edward Wolff, a professor of economics at New York University says, “in the United States, the richest 1 percent of households owns 38 percent of all wealth.” According to the National Center for Children in Poverty, “roughly 72 percent of Americans believe that the poor can become rich, and this belief has long been tied to common definitions of the American dream.” However, it does not seem like the poor in America can escape poverty; they can only dream about it.

After all, the United States has rich resources and wealth that was made by a large amount of resources; it seems to widen gap in the American society. Can most people become the rich? The poor people dream of what will not come true in present society in America.

The United States government is not required to balance its budget. It does not seem to stop the waste of resources or narrow the gap in the society. This will require Americans to change their thinking and minds. I love the American dream and I want it to be real. I want Americans to be thinking and understand about others’ sorrow and pain. The United States can overcome these tough times and can get rich in the true meaning of the term. I think it takes both money and heart. When we sacrifice all of society can become richer.

Playing Chicken with the National Debt

gnekuda — Fri, 11 Dec 2009 18:48:59 -0500

In an egg farm, chickens that lay eggs are useful and help the business make a profit. Most chickens lose their ability consistently to lay eggs after about one year of life. This causes the company to have to pay more to feed it than it would gain from the sporadic eggs it might collect. At this time, the chicken is sold to a business that will kill the chicken, which would then be used for food. The business loses its non-productive asset and turns a profit from it. Do we want to follow a practice similar to this? The national debt already is a large problem and the challenges will become more intense if we wait.

Two of the largest outlays of the government are health care and Social Security. These mostly go to the elderly whose most productive years are likely to be in the past. Obviously, a smaller population of those eligible for programs like Social Security and Medicare would decrease the obligations of the government. No civilized society would engage in involuntary euthanasia; however, is it the same if society abandons the elderly?

The strongest are likely to survive and age is not the only factor involved. Some people remain active and are still part of the labor force well into their ninety’s and beyond... They could be some of the most productive people because of experience, wisdom, and healthy life styles. Rather it should happen for hopelessly incurable patients in either medical or psychological cases. If a person is brain dead, should we as a society prevent the family from immediately allowing him or her to die? Is not prolonging the process just a drain on resources and strain the emotional health for those still alive? As heard on 60 Minutes on November 22, 2009: “Last year, Medicare paid $50 billion just for doctor and hospital bills during the last two months of patients' lives - that's more than the budget of the Department of Homeland Security or the Department of Education.”

If we made compassionate and realistic decisions, and everything else stayed the same, we could make significant progress on the growing the national debt in a matter of years. This is a purely logical and emotionless option; however, is it viable? Nobody wants to try to draw the line between who is productive and who is not, but does income effectively do this? No politician will ever propose this. Unfortunately, if the national debt continues to grow as it is projected, then this may be the ultimate course of action if we do not find effective solutions soon.

A much better alternative is to take care of the problem now. Everyone wants good government programs but few want to pay for them. This line of thinking is the problem. If people would realize that benefits have costs, there would not even be an issue. The majority of Americans do not want any programs to be reduced so the requirement is a higher tax rate. Unfortunately, all programs may be forced to diminish automatically due to the crisis that is unfolding. If there was more money to go around, the other programs wouldn’t have to suffer.

The United States has one of the lowest tax rates of the technologically advanced countries. Yet its citizens expect the most from the government. The expectations are good schools, beautiful landscapes, health care, protection, and so many more. Educational systems are already funded with far less than before and many institutions are getting less every year. The national parks, where millions of people go to every year, eventually may have to be sold because the government may not be able to pay to keep them. Even the costs associated with national defense will have to decrease because the American society is aging and soon a large percentage of the population will be entitled to governmental assistance.

The national debt already is a large problem and the challenges will become more intense. If America does not take a moderate course of action soon, such as raising taxes, then it will be forced to take an extremist course of action. When we seriously consider the alternatives over time, Americans probably prefer to pay for the benefits they receive in one fashion or another. Would we rather have a smaller increase in taxes now or a much larger increase in a few years? How long can we afford to play chicken?

America is Drowning in a Sea of DEBT

danicawhite3 — Fri, 11 Dec 2009 17:17:15 -0500

Do Not Blame One, Blame All

Whitney Starr — Fri, 11 Dec 2009 16:29:08 -0500

I can guarantee that one of the many worries a college student faces every day when they wake up and start their day of classes, is they are going to have a job once they have completed their education, which is going to help them pay back those student loans they have borrowed. After spending thousands of dollars to better their futures, is it someday going to pay off, or have they wasted their time by adding their chunk of loan money to the national debt? It is in troubled times like these, somehow you wonder how we got here, and how did it get this bad so quick? Of course, whoever the individual that has the title of president that is hanging over their head is going to get fingers poked at him, but is that really necessary? The national debt is a problem that has been created by more than one person; therefore, the blame rest upon many of the individual’s living in the United States, because it is ever so simple to charge a plastic card and borrow money that cannot be paid back easily. Of course there are other contributing factors to the national debt such as the war and even the recent bailouts. The national debt is not something that is going to be fixed with the wave of wand, but is something that can be if American people just stop and look at how their money and their tax dollars are being spent.

A potential consequence of our growing national debt is a total economic crash. This would most definitely be a turn for the worse, but could very likely occur. This year many Americans watched the stock market take a pummel, as they sat back and watched to see if this was going to be a replay of the Great Depression as they held tightly and closely to their jobs. It is hard to fathom getting out of bed each and every day wondering if that factory that your parents are employed at, or that hospital that those doctors your grandparents see on a regular basis are going to be there from day to day. Without out a doubt many businesses big and small are closing their doors right before our eyes leaving millions unemployed; in result of the current unemployment situation, finding work once laid off seems to be getting tougher and more scarce. Bailing out the auto industry did save a great number of jobs, but the only thing that I believe is fair, is if you bail out one large business you better not forget those small businesses that do have employees too. Think about it, it is only fair. Jobs are most definitely not the only thing that has took a deep dive, but the housing market has as well. Employment and housing go hand in hand with one another. Driving around a city or a small town, stop and look around. See all the, “For Sale,” signs scattered throughout the streets. You once thought you knew the neighbors that lived next to you; consequently, the next thing you know is that you have a foreclosure sign standing in the yard next to you, because the bank seized your neighbor’s house.

Now the question is how we as a society put an end to all of these devastating things that are turning our lives around. Budgets could be key in solving our ever growing national debt, by just simply cutting back from Medicare, Medicaid, education and even national defense. Just by cutting back a small portion on these things, will help America get ahead of herself before she is drugged completely into the ground. Therefore, if some type of reform can just be laid out and get passed that can consist of some goals and restraints of how money is being spent, it will then inch America closer and closer to the prosperity she once had. Another resolution to helping ease the national debt would be to end the war. Right when we thought we were getting closer to bringing our entire troops home, we send more overseas. It is getting close to a decade since America has been at war, and it is going to take longer than that to dig her out of her financial troubles.

It is quite relevant that something needs to be done about the national debt. For starters we as American’s can start by watching how we are spending our pennies, and remember that the minute plastic cards that may fill our wallets is not something that is going to cure our national debt.

Old Debt, Big Deficits, Bigger Problems

fliu2009 — Fri, 11 Dec 2009 12:53:51 -0500

Due to the 2008 Financial Crisis, the federal budget deficit is becoming worse and adding to the national debt. The current national debt, according to government report on treasurydirect.gov, on December 8, 2009, is $12.1 trillion and this number is still growing! (The Debt) How could the Federal budget deficit be this huge amount and what we can be done to help the American economy get back to a healthier condition?

At the beginning of this year, President Obama signed the $787 billion economic stimulus package and tried to heat up the American economy. One of the main purposes of this package was to prevent the panic from happening again by investors in 2008. In order to calm down residents in America, the government tried to relieve some private debt burden, and help people find jobs.

The American economy absolutely could be stimulated more if the government spends more. However, due to the huge national debt, the American government only has one way to get more money, which is borrowing. If it had accumulated surpluses when the economy was at full employment, this would not be a crisis. The government needed to spend this money on creating jobs, cutting taxes, encouraging consumer spending, and working on some other policies to avoid a depression.

Since the rate of unemployment increased in this recession, many people do not have income to cover their credit card debt. Therefore, they have to use some government programs, like unemployment insurance, to help them go through this tough period. By the increasing number of workers forced to use programs, the cost of American government goes up. Moreover, the government cannot just keep existing programs, but it was forced to create new programs to fit this special recession; otherwise, a depression could have developed. The cost of creating these new programs increased the deficit and national debt. In addition, the recession cost people’s jobs and the government will not have as much income tax revenue.

During the Opening Session of the jobs and Economic Growth Forum on Dec. 03, 2009, President Obama claimed that American economy has a significant turnaround since the beginning of this year. The economic was in freefall; 700,000 jobs were lost per month. The Recovery Act the government passed stopped the freefall, and the economy may have started growing. However, the most important purpose of this Forum was encouraging businesses to create jobs. He said, “While I believe that government has a critical role in creating the conditions for economic growth, ultimately true economic recovery is only going to come from the private sector.”(Office)

By looking at another aspect of the government’s actions, it was obvious reducing tax rates helped people relief some of stress. Nevertheless, it also decreases the government income, which means the government will face to a bigger deficit now and in the future. According to whitehouse.gov, for middle class, 95 percent of all working families can receive a tax cut and 70 percent of tax benefits will be spent on more than half of American workers. In addition, “more than $150 billion in tax cuts will help low-income and vulnerable households during the economic recovery.” (“Taxes”) More taxes cut means less taxes revenue for the government; this causes national debt to increase.

The federal budget deficit definitely hit a record and the deficit in 2009 has more than tripled in just last year. David Jackson posted an article on the USA Today and showed that the deficit total will reach $9.1 trillion in the coming decades. (Jackson) As a result, the amount of the national debt will keep increasing, and interest on the national debt will become a big problem.

Although the economy of America may have begun to turnaround, the large amount that will be owed in interest due to the national debt will be a big problem, especially as interest rates increase. If the government does not have the ability to payback in a certain time, or even as if there is concern about its ability to finance it debt, the number of countries who would like to lend money to America will go down. Then it will be much harder for the American economy to grow.

The 2008 Financial Crisis caused a series of problems and the national debt is one of them. People can try to save money and earn more; this will help, but it is not enough. The problems that began long before 2008 cannot be corrected easily. In order to decrease the federal budget deficit in the future, one thing that American government must consider is raising taxes. In the future, the government should consider the need to raise taxes again if it does not have a surplus or at least a balanced budget when there is full employment. Another thing it should consider is paying for things, even war, without borrowing. Shifting the burden to future generations should not be an option.

Work Cited

Jackson, David. “Obama team makes it official: Budget deficit hits record. By a lot.” Oct 16, 2009. Dec. 9, 2009. http://content.usatoday.com/communities/theoval/post/2009/10/620000005/1

Office of the Press Secretary. The White House. “Remarks by the President and Vice President at the Opening Session of the Jobs and Economic Growth Forum”. December 03, 2009. 1:42 P.M. EST. Dec.9, 2009. http://www.whitehouse.gov/the-press-office/remarks-president-and-vice-pr...

“Taxes”. The White House president Barack Obama. Dec. 9, 2009. http://www.whitehouse.gov/issues/taxes
“The Debt to the Penny and Who Holds It”. Treasurydirect.com. Dec. 9, 2009. http://www.treasurydirect.gov/NP/BPDLogin?application=np

One Small Step...

Lezley Lawson — Fri, 11 Dec 2009 11:41:14 -0500

We face so many fiscal challenges that we cannot solve all of our problems with one simple solution. One of the larger factors in America’s growing debt crisis is the cost of Social Security. The flux of babies born after World War II became known as the “baby boomers”. With the retirement of these “baby boomers”, the cost of Social Security will be higher than ever. The only way to find a solution to this problem is to figure out why Social Security has become so costly, then solutions can be found to reverse the debt that will be caused by Social Security; this will allow us to reduce our nation’s growing deficits and national debt.

Taxes were first collected and redistributed as Social Security in 1937 to help stimulate the economy during the Depression. Social Security benefits also served as an incentive for older workers to retire and allow younger workers to get jobs. With the challenges of the Great Depression, this made sense back then. Monthly distribution started in 1940. Understandably, the first people to receive Social Security had paid virtually nothing into the fund. From the very beginning, younger generations paid for older generations to have Social Security. Now there is a never-ending expectation to have Social Security benefits. This explains why the “baby boomers” have had such an impact on the success of Social Security as they worked and paid into the fund and why they are now its problem. A vast number of people will be leaving the labor force and their retirement will create higher costs for Social Security. The big question now is how the younger generations will fund this growing cost of Social Security.

The most obvious solution is to raise payroll taxes. With more money coming in, increased Social Security payouts will not have as large of an impact on our nation’s rising debt. The problem with this solution, however, is that Americans seem unwilling to pay higher taxes. This type of tax increase might ensure Social Security will be in place when younger workers, who will fund the current program, reach retirement age. It is easy to say we want a solution, but more challenging to convince Americans of a solution when the rewards are not immediate, especially when it involves a tax increase.

Extending the retirement age even further is another possible solution. If every person in the labor force paid into the Social Security fund a few more years and received Social Security benefits a few years less, then the deficit could slowly be reduced. Aspects of this solution are already being implemented, but not enough to continue the current program. If we wait too long, will the government have to push back the retirement age so far that, in time, there will be no retirement age, and people will simply work until they die? Older workers currently in the labor force have expectations to retire at a certain age and we can expect them to defend the current system. This leaves younger people in the prime generations to have extended retirement ages or face much higher taxes later. This solution may be the easiest for the government to implement because many young individuals do not think about their retirement. Many are anxious to earn income, have big dreams of making millions, and do not stay informed on current issues like national debt. We trust our government.

According to the Social Security and Medicare Boards of Trustees 2009 Summary, “Social Security could be brought into actuarial balance over the next 75 years with changes equivalent to an immediate 16 percent increase in the payroll tax (from a rate of 12.4 percent to 14.4 percent) or an immediate reduction in benefits of 13 percent or some combination of the two.” Another solution would be to review and revise who will be eligible for Social Security changing it to be based on need to some extent. Social Security has developed into income most individuals expect when they retire. Although it covers more, staying focused on retirement is an important first step. Many individuals pay into Social Security and no other retirement plan. Funds have already been spent on current retirees with the understanding that other people’s money will be spent on current members of the labor force when (or if) they retire. Should Social Security be further revised into a partial pay to existing retirees and a partial insurance investment program for the individual paying into the program? Would this increase the commitment to the success of Social Security? Would people be willing to pay more into Social Security if they knew they would ‘definitely’ benefit?

It is imperative that young adults become aware, get involved, stay informed, and vote. Individuals receiving Social Security tend to vote. They want greater Social Security benefits without raising taxes. However, it does not work that way. Collectively, we do not get something for nothing. Social Security is only one issue affecting national debt. To reverse this debt, each and every issue must be confronted individually and aggressively as if it were the only issue of any importance. Reducing the parts will reduce the whole. Social Security is beneficial and necessary for many people; however, changes are inevitable if the program is to survive. If long-term solutions continue to be avoided, the alternatives may become untenable, and dissolving the Social Security program does not have to be where we are headed. Whether it is going to the moon or charting a new fiscal path, solutions can be found to reverse the debt that will be caused by Social Security. Let us resolve to stop shifting the burden by seeking long-term solutions to all aspects of our deficits and debt.

Works Cited: A Summary of the 2009 Annual Reports: Social Security and Medicare Boards of Trustees
http://www.ssa.gov/OACT/TRSUM/index.html

Where Do We Go From Here

mblazek2008 — Fri, 11 Dec 2009 02:37:13 -0500

In this time of crisis we look to our president, our neighbors, and our families. But rarely do we look to ourselves for the answer. As a group we struggle to maintain our unity but individually we struggle to maintain so much more than that. We strive to maintain our homes, our possessions, and our stability. The federal debt crisis grabs a hold of us, trying to strangle the life from us. Even though it has yet to conquer us, we must only give it time. The only way to fight this atrocity is to look within ourselves to find the answer.

This time of supply and demand has taken us all by storm. We spend when we least have the money, save when we should not and take when we should give back. It is hard to resist the urge to follow the group, to jump on the bandwagon and go along for the ride. Each hill we traverse and each dip we come across seems to make us stronger but it only weakens us by giving the false illusion of security. Instead of flocking together we should each individually work on our own. Though it is hard to imagine our country that is united through spirit and courage to divide itself, we must. It is the only plan of action we can take to stop the federal debt from rising to the heavens.

The federal debt had been around and growing for years that it is simply a staple of our lives. Hardly do we think about it and when we do we blame it on others, such as the government. We blame their spending, their over-the-top ideas. Truthfully though, the lowly blue-collar farm worker or even the high executive with a cushy job are to blame. The reason for this is the simple fact that none of us really believe the federal debt crisis can ever touch us. Since the Great Depression, individuals believe they are stable. Even when we are on the brink of total destruction, we find a way to make it through unscathed. Or so we think. Though we have had recent times of crisis, we still manage to make it through the tunnel and hardly look back to the ruin we have created. This high level of seemingly immortality is what has given us the false sense of security and keeps any individual from realizing that they are the true problem

To overcome this crisis of the times, we must separate from the group. We must act individually. As a group, we are too confident in our abilities, to sure of our future. As individuals we are much more aware of our mortality. It is in we stop and look back in the proverbial tunnel that we realize just how much destruction we have left in our wake. And for just a moment, we think, ‘Where do we go from here?’

Truthfully, there is no single solution to this problem that plague’s our country. Though we seemingly have our individuality in our separate opinions, we are really just a part of a small group, separate from others groups with different ideas. These ideas do have weight, the opinions of every group matter. But no group is large enough to simplify or even eradicate the problem. Again, we must separate so completely that we take responsibility for our own actions and ideas. We must become unique. In that exclusivity, we develop more ideas, more ways to help with our crisis. As said before, there is no single solution, and working in groups does not seem to help because though there are several ideas floating around, individuals are the only way to put those plans into motion.

Several of the ideas that have surfaced recently are to pay back the debt by raising taxes. Other ideas include simple pulling out of other countries to deal with the problems back home and even just ignoring the problem and eventually it will all work itself out in time. Each of these ideas does hold weight, but does one ever really see them being taken into action? No. Because, once again, there is no specific individual that wants to break away from the group to actually start the plan.

This all seems like a grandiose plan. How is it even possible to separate a single entity from a group, give them enough courage to go out on their own and enough stamina to actually see a plan through? Simply put, we must act. Now, I am not saying that we must separate forever from the group of our country, but we must separate long enough to actually get the ideas going. If we are able to do this, to actually become individuals and assess our own, unique problems, then there will be at few that will suddenly have a ‘Eureka’ moment and start their campaign to end this horrible problem. Once there plans are under way, only then can we merge back into a group to keep the plans moving, to give them weight to follow through. If we do not start working individually, eventually we are going to lose all hope and every natural thing we know about our society will disintegrate until there is nothing left. So go out there, become an individual, become the one idea we need.

Hindering the Youth with Debt

Abigail Burleson — Fri, 11 Dec 2009 01:15:17 -0500

“And to preserve their independence, we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude.” Thomas Jefferson, one of the greatest presidents in the history of this great country said this in one of his speeches. Perpetual debt is exactly what the people of this nation are facing each and every day. There are many causes for the debt and many more consequences. Solutions to solve this growing problem, is what the United States is lacking.

The national debt is a little over twelve trillion dollars. Many Americans cannot even comprehend what a trillion would look like, but yet the national government keeps borrowing money as they spend more at an increasing rate. There are many causes for this problem. I believe that the government does not see the consequences of all of this spending and instead of stopping the problem now, they just add on to it. War is also a big reason why the spending is so high. The government also sees a solution to the problem in cutting the budget for other things that this nation really needs. A couple of the things that they have recently cut budgets on are health care and education. For each war that breaks out in the world, the United States government puts in more and more money to help out these other countries without seeing the consequences that are occurring at home. These consequences are numerous and never seem to end.

For every dollar that is spent, there is another person suffering. The consequences of the national debt are felt nation wide by everyone. Our social security has disappeared because our government could not control the money. We have increasing health care when other countries have government run healthcare in which the citizens are not responsible for any of the bills. The United States of America has more and more people living on the streets because they cannot get jobs or afford anything. The generations that are hit the hardest by the debt are the younger generations because the funding for education keeps getting cut more and more. Education is an important part of finding a job and the government just does not see this when they decide that they are going to cut back on spending. This is where we as citizens should raw the line. The younger generations are the future of this nation and we are just going to sit back and allow funding for their education to be cut?

Solutions are what this world needs and there are many solutions to this problem. This nation has been led into debt my many generations of people and it would only take one person to propose the solution and implement it to get the nation on the right track out of debt. I believe that one way to control debt is to allow the government to control health care. This would allow the prices to lower because the competition would be eliminated and all of the money that would be made would go back to the people through government spending. Access to healthcare is one thing that most Americans worry about on a day-to-day basis because there are so many choices but yet so many limitations. The government could also control the banks. Although the people do not want to be under full control of the government, if the government controlled the banking system more there would be fewer problems. Government run banks would eliminate the competition in banks and could ultimately eliminate interest rates because the interest would be the same at all banks. This would eliminate sub-prime rates and allow the government more money to start paying off debt to other countries. The United States is one of the most powerful nations in the world but yet we are weakened by our inability to stop spending money.

This nation is in a serious crisis because no one has spoken out about the budget. It would only take one voice to speak loud enough to give this nation the turn around that it needs. There are many causes and consequences of the twelve trillion dollar national debt but it is the solutions that everyone should be searching for and expressing. A lower national debt would allow for more spending in healthcare and education. The younger generations deserve a full opportunity to get the education they desire. There is no reason why the government should hinder the ability of a young person to dream of becoming a doctor, lawyer, or even the next president of the United States. This world needs to take a step back and look at their priorities because right now they are all wrong, we should value our old and our young and allow the people of this great nation full opportunities to dream big. My dream for this nation is to get the debt down below one billion dollars.

Spread the Word

Gary Lenoir — Thu, 10 Dec 2009 22:30:07 -0500

When talking about the budget crisis alot of people are illuterate to the fact. As the up and coming generation we need to take time to find out what going with our economy. I know the people I know are aware that we are going trhough a recession but they keep hearing that it's going to be okay so they don't worry about it. People of this generation don't relize that what's going on right now willl affect us the most in the long run. The way things are going right now our generation won't be able to retire, people need to hear things like this. I believe we need to stop doing careless spending, it's time to invest our money in things that will be worth something in the future. The most important thing to me is to educate people about what's going on. It is up to us as a generation to do so because the goverment will hide it as long as they can until we reach a depression. I think the goverment will do so because they don't want the country to panic, we are the U.S.A. and were suppose to be able to handle anything. What I want to do is start on the street by telling everybody I know so they can be more aware so they can start preparing for the future and hopefully they past the word on. Thats why I call this paper Spread the Word. People need to relize what they do can also affect other people. Hopefully this generation comes together and will be able to leave a positive mark in history.

So, We're in trouble. What do we do?

Grandobsidian — Thu, 10 Dec 2009 20:18:49 -0500

For the past couple years, I’ve been listening to the media clamor about unemployment, the national deficit, and health care. Until recently, I really didn’t care too much. Now, as I try to find a means to support myself when I eventually leave high school, it’s gotten a tad bit more interesting. The honest truth is, my town hasn’t been hit too hard by the recession but it’s been hit hard enough to annoy me senseless in trying to find a part time job. Being a high school senior, I’m required to take a course in government and because of that, I’m getting a better understanding of how the national debt has come about and what can probably fix it. I’ve never claimed to be an expert in anything, but I know history well enough and I’m just as well off in government and economics that I can try to formulate a plan I think makes sense that I can explain simply. Really, when I take what I’ve learned in just a few years and compare it to what the government is trying to do, it almost astonishes me that people over think situations so much. I plan to lay down a fairly straight-forward look at the nation’s condition and state what I think can really turn it around. My plan is to look at former leaders, what they’ve done, what has actually happened as a result of those actions, and what is probably holding us back today.

President Franklin Delano Roosevelt…was not as great as everyone thinks. “Oh, he saved America from the Great Depression,” people say. He actually almost made everything worse until he lucked out and got pulled out by a World War. Roosevelt’s plan was to simply put people back to work by making new government sponsored jobs. Yeah, great plan, too bad he couldn’t really fund it that long. Today, we’ve tried to pull the same strategy since most people didn’t get much further into what happened in that “New Deal”. FDR made the people happy, I’ll give him that, there’s nothing wrong with that, but he simply could not sustain his plan. The government runs on taxes, taxes citizen pay, right? Okay, so how can the government pay out more money without actually pulling in more money? At this point in time, the Second World War hasn’t started and Germany was still supposed to be paying back the money our team decided they owed. It’s fairly common knowledge that Germany was in a sorry state, but how did they get out? Hitler decided not to pay up, and pretty much let him for a while. Of course, a basic history course lines out the basic series of events that happens until World War II starts.

So, how did America pull itself out at this point? Well, I think most people would say we went to war, but I’d say everyone else going to war helped us, I’d say other would agree. It’s also true that our immediate industrial overhaul when we entered the war helped too. Okay, next step, war’s over, how are we still on top? Oh hey, we have a ton of soldiers coming home and plenty of good factories, let the consumerism begin. Now, this free capitalistic spirit does not ensure a healthy economy, but it is a good stimulator since money in hand is money for businesses, usually, and businesses make jobs. So, why didn’t the stimulus bill work out? People have debts and the average pay out was around $600. World War II GIs were marching home with several years of salary, federal aid to college (which means more money down the line), and, again, the factories are still booming. You can see where a train of thought would think we could fix the economy this way, but an economy is not about just buying things, it’s about paying people to do jobs. FDR got lucky and the history books think he was a saint.

So, my plan? I say follow Kennedy. All anyone thinks is that he stopped a world war, but he also stopped a recession by cutting taxes on the wealthy business owners. Carter later did the opposite and got the opposite effect. Reagan, again cut taxes and got a major economic recovery.

There’s no one to simply save us from 12 trillion dollars of debt, as nice as we are, and no one to get into a world war so we can sell them weapons. We need to admit this is a problem we can solve on our own, and we have to be ready to take some time to let it happen. I stand by proposal to have the government stop choking the private sector before it kills its goose that lays the golden eggs.

Hopefully, I’ve made my point. The government is not our babysitter; they are our regulators and defenders, that’s what we pay them to do. I’ve argued my point to support businesses to create more tax revenue so the government can get paid. Historical facts have been used to strengthen my case and point out the failures of our current economic strategy. I have made suggestions for methods America can use to gain a profit off other nations. Now I leave to consider my points and ponder what we should do. Personally, I’m going to keep looking for a part time job, further my education and seek out the demanding field of Physics. My last point to make is this; the best solution isn’t always the obvious one or the easiest one. I have more to say, but that's 1000 words so I'm done.

Means-Testing Social Security

zskaggs — Tue, 01 Dec 2009 12:59:43 -0500

The United States faces an uncertain fiscal future. Experts agree that the federal government’s current spending levels are unsustainable. An economic recession, financial bailouts, and an expensive stimulus bill have combined to create a projected $1.75 trillion deficit for 2009 and trillion-plus dollar deficits for years to come.[1] Even had recent events never occurred, the benefits the federal government has promised future generations of Americans, primarily via Social Security and Medicare/Medicaid, are projected to consume an ever-growing and unsustainable share of the federal budget moving forward.

In seeking to restrain skyrocketing public debt levels—currently $11.9 trillion and growing at the enormous rate of $1 trillion per year—the U.S. health care system has lately come into focus. There are efforts afoot to refashion U.S. health care , which currently consumes 15% of GDP, along the lines of other systems that spend sometimes half as much (Japan spends about 8% of GDP) but achieve comparable health outcomes in their populations. Assuming that the goal of cost-reduction is achieved by these efforts—a big assumption—health care reform is one way to significantly cut into the U.S. government debt load.

The other major way to tackle U.S. debt, and the focus of this essay, is through reform of the Social Security system. The single largest item in the federal budget—indeed, the largest government program in the world—is the U.S. Social Security system, consuming about 20% of the federal government’s budget in a given year. But in moving to modify Social Security, we must be careful where we cut. Social Security plays an important role in providing for the financial security of the elderly, with some estimates arguing that Social Security keeps roughly 40% of Americans age 65 or older above the poverty line.

Social Security came into existence in 1935 as a centerpiece of President Franklin Delano Roosevelt’s New Deal legislation. Its purpose was to provide pensions to retired individuals, modeled after public pension programs that nations such as Germany had already adopted. Social Security has been repeatedly expanded since its inception. In 1940, Social Security paid benefits totaling $35 million. Today, Social Security payments go to 51 million Americans at the cost of $650 billion per year.[3] This number is slated to rise exponentially as the Baby Boom generation enters retirement.

There have been various proposals to reduce future promised payments via Social Security. A debate during the presidency of George W. Bush centered on whether to institute a system of private accounts, by which younger workers could put a portion of their Social Security payments into an interest-accruing account that they personally would collect in old age. This contrasts with the current "pay-as-you-go" status quo in which Social Security payments to the retired are made on the basis of Social Security taxes taken from current workers. The proposal for private Social Security accounts, while it may have gained political traction, strikes me as a distraction when it comes to achieving fundamental cost-reduction for Social Security. The reform, by itself, does not actually promise to reduce promised payments via Social Security in the long-term, merely re-orient them via personal savings accounts. Moreover, in the short-term, the reform would require massive deficit spending and borrowing to finance, as younger workers move their money out of the system, leaving nothing by which to pay older retirees. Thus, the proposal seems politically unworkable and financially a wash, unless other reforms are also instituted.

Another proposal calls for raising the age at which Americans can claim Social Security benefits. Currently that age is 65, but while at the time of Social Security’s introduction this may have been the typical retirement age, today, people often work well beyond it. Raising the age at which people can collect Social Security benefits, while necessarily unjust to those who must wait longer than anticipated to collect Social Security benefits, strikes me as workable and a relatively pain-free way to reduce federal spending on Social Security. One problematic aspect, which is not a problem in the proposal I will delineate below, is that it would make it significantly difficult for the poor elderly between age 65 and whatever the retirement age were raised to.

Economist Tyler Cowen points out that Social Security consists of two components: a welfare component and a forced savings component.[4] That is to say, Social Security forces workers to put away some money from their current earnings to be (theoretically) repaid to them in their old age. This, the forced saving component, is something that could be performed voluntarily by the worker and need not be administered by government fiat. At the same time, Social Security is also a form of welfare. It is this latter function that is the most important function that Social Security provides, the one for which it was originally intended, and the one that needs to be protected in the process of any reform. For that reason, I argue for means-testing Social Security, or essentially, converting Social Security into a form of welfare for the poor elderly. Only those individuals living below the poverty line would be granted Social Security benefits under this regime. It should be noted that the elderly are in fact generally the richest Americans, with peak wealth by age being 63 in the United States.[5]

Converting Social Security into a system that acts purely as a welfare payment system for older individuals preserves the core function of Social Security while preserving America’s fiscal future. This proposal would significantly shrink benefits dealt out currently by Social Security as well as its future promised benefits. Moreover, it would do so in a manner that would not hurt the poorest and frailest among us. It would, however, represent a significant loss of potential wealth for the middle- and upper-class elderly, but, as noted, these represent some of the richest people in America. Note that this proposal could conceivably combined with other reasonable proposals such as raising the retirement age at which Social Security recipients begin receiving payments.

1. “1.75 Trillion Deficit Seen as Obama Unveils Budget Plan.” New York Times. February 26, 2009. Accessed Nov. 17, 2009 at http://www.nytimes.com/2009/02/27/us/politics/27web-budget.html.
2. Orr, D. (November - December, 2004). “Social Security isn't broken: So why the rush to 'fix ' it?” In C. Sturr & R. Vasudevan (Eds.), 2007, Current economic issues. Boston: Economic Affairs Bureau.
3. “Social Security (United States).” Wikipedia. Accessed November 17, 2009 at http://en.wikipedia.org/wiki/Social_Security_%28United_States%29#Expansi...
4. Cowen, Tyler. “Should we privatize Social Security?” September 30, 2004. Marginal Revolution. Accessed November 17, 2009 at http://www.marginalrevolution.com/marginalrevolution/2004/09/should_we_p...
5. Cauchon, Dennis. “Generation Gap? About $200,000.” May 24, 2007. USA Today. Accessed November 18, 2009 from http://www.usatoday.com/news/nation/2007-05-20-cover-generation-wealth_N...

Health Care and National Debt

mschapiro — Mon, 23 Nov 2009 00:57:18 -0500

Our nation’s health care system is broken. While America tops lists for health care quality, each year Medicare and other health care programs continue to spiral our nation further into debt. As Congress debates the correct method to bring reform to our failing health care system, many are wary over the future of federal fiscal spending and how any health care reform would factor into government spending. Unfortunately, without a major overall or change of philosophy in how our government attacks fiscal policy, there is no easy way to get our nation out of debt.

While fiscal responsibility now ranks among Americans’ top three issues they care about, it continues to take a back seat among many politicians and average American citizens. When discussing policy and legislative action, we seem to think about the end goal before we think about how we will get there. For example, in our health care debate there are three main issues: (1) amount of coverage, (2) affordability, and (3) the overall size of the program. Despite the size and cost of a government-run single payer system or a public insurance option, many continue to advocate for these programs simply because they offer the best chance of covering Americans who wouldn’t otherwise have been able to afford health insurance. This mentality is not shocking, but it is worrisome as our country prepares to deal with the unenviable failure of Medicare and Social Security.

Even though 37 to 47 million Americans go without health insurance, the focus of health care reform is finally being shifted from the ends to the means. As was said before, one would be hard pressed to find someone who did not want to see every American covered by health insurance, however, the major problem is: who is going to pay for it? Right now, it seems there are three options: a full government system, a government intervening system, and a free market system that keeps the government on the outsides, for the most part. A full government run “single payer” health care system seems to be the most expensive option right now as it would cost the nation well over one trillion dollars to put in place the system. A semi-governmental system with a “public option,” which is being debated in Congress, would most likely cost 900 billion dollars. A free market system would most likely cost less than 400 billion dollars.

So why do Americans want to chose the options that are most likely to add to our national debt? As was said before, most Americans do not think about the fiscal consequences of legislative acts. Put simply, Americans have been spoiled since 1945 in terms of the outcome of legislative action. In the late 1940s and 1950s, there was a mixed amount of legislative action, with positive results including legislation that created the Central Intelligence Agency and the Department of Defense, as well as the first Civil Rights Act and the expansion of a national highway system. Following in the 1960s we saw many programs under Lyndon B. Johnsons, including Medicare, that were quickly very successful for the population. Up until the 1970s, Americans were very happy with the work Congress had been doing. As financial problems took their toll on America, the people began to be wearier of government and their role in enacting policies that were good for the country‘s future. In the present we see that people have truly grown weary of government and now consider these fiscal issues to be the most important to our country.

So how do we fix these problems and finally get out of debt? First, we must stop thinking that there is one solution or path to totally balance our nation’s budget and get us out of debt. America spends so much money that it is truly impossible for our government to get out of debt within one or two years without cutting essential programs that many in our country rely on. We must be progressive and think outside the box. Sticking to traditional methods of saving money (or spending it for that matter) do not help us and we need to truly audit our government and find every program that isn’t worth the money spent on it.

Finally, we need to overhaul our health care system. With the cost of our nation’s health care equaling approximately one-sixth of our budget each year, we need to find a way to provide health care that is both affordable to the buyer and to the government. The reason why Congress has not found a solution is because there are so many ideas that clash for reasons other than cost. Most arguments deal with the conservative-liberal argument over the size and effectiveness of government, as well as arguments over social issues like abortion. Since Americans and those in Congress cannot seem to find common ground on these issues, it seems inevitable that the House of Representatives and the Senate will have to come to a compromise, which in turn will not be the most comprehensive or sweeping change possible. This legislation will ultimately serve as a band-aid for our failing health care system, forcing the next generation of Americans to deal with this problem.

As I have discussed, Americans say they are concerned about fiscal responsibility, but are not willing to make the commitment to ideas that bring about sweeping reform that change the system for good. Many are worried about the outcome and not about the means for getting there, thus we will continue to see our country spiral further into debt.

Taxes: How Much is Enough?

j.b.e.8491 — Sun, 22 Nov 2009 20:10:11 -0500

Jason Elkin
Professor A. Yarrow
US Since 1945
12 November 2009
Taxes: How much is enough?

Let me start this paper off with a little story. Brian came to the United States from South Africa for economic opportunity in 1984. With economic sanctions being put on his home country’s government, getting out with proper paperwork was complicated, but getting money out was even harder. After finally being stamped through New York’s JKF airport, Brian had a tough time exchanging his rands for dollars, because no one wanted South African money. With difficulty, he got his couple-hundred dollars. Fresh off the airplane, carrying only a suitcase, the clothes on his back, a resume, and the drive to work hard and push upward into America’s working class, his life in America began. Twenty-five years later, this immigrant who came here with almost nothing lives in a suburb of New York with his wife and kids. He is currently paying off a mortgage and a car, works in Manhattan, and chooses to keep on working hard. Every month, the government sends him several bills requiring that he pay a large amount of his income, or what the government thinks he owes them, which then gets redistributed to people and organizations that the government deems fit.

According to the Cato Institute, income taxes were at around thirty-percent under the Bush administration. Under the Obama Administration, taxes are on the rise, and are continuing to do so, with no set rate actually recorded. The president has talked about launching a $503 billion stimulus in the next year or two. I have qualms with this issue. People like Brian bust their chops everyday to make their money and risen up in American society, one hour at a time. Every ounce of effort he puts in eventually translates into money, and it might be above the national average, but it doesn’t happen because he sits around and does nothing. Does a man like Brian deserve to have the government hands in his pockets? Does he deserve to be punished for working hard and making an honest dollar? Who has the right to critique a man like this?

Out of all the policies created by American presidents, my mind always seems to shout out one word—Reaganomics. Call me biased, but I think Reagan was one of the best presidents this country has ever had. Not only were his politics regarding Communism stellar to his predecessor Jimmy Carter, he also made American interests extremely clear in the international community. But what’s most important is how he handled economics during his time in office; keep in mind that this is coming from a guy like me, who is a first-generation American. The basis of Reaganomics states that the government reduces spending, reduces taxes, primarily income tax, reduces government regulation, and regulates money supply within the country. In doing this, citizens would have more spending money, and thus spread their wealth both internally and externally throughout the country. In many ways, this worked in the nineteen-eighties, allowing Americans to live quite prosperously, always willing to spend money. With the ability to spend money, people will be able to have their businesses and firms prosperous, and the more money that is available, the more the economy can expand. The more you spend, the more the government can make off of taxes, because people will have the ability to spend their money. By keeping taxes high, the government is directly taking money from the citizens, and, sooner or later, they will come to understand and resent this fact.

If the government taxes the people in a way that isn’t so direct, then there might be a chance that there won’t be a general-populous-versus-Federal-Government Issue. Because, let’s be honest here, no one likes having the government’s hands in their pockets. The only people who don’t resent taxes are minorities, the overly poor, and rich white Liberals, and even they pay taxes. During the Reagan administration, Americans followed this economic structure, and it was because of this that the economy came very close to being at an all-time high. While, of course, the poor didn’t exactly prosper from this structure of spending and relied heavily on Democratic handouts, it should have encouraged them to work, because the more they worked, the more money they could have made, and the less they would have to give back to the government because taxes were so low. This would allow them to save more, as well as spend more, which would eventually come back to them and their community. During this time, Americans were welcome almost everywhere they travelled, because their host countries understood that they would be willing to spend more money and help boost their economies. Of course, the Welfare Act of 1996 limits the amount of welfare that can be handed out and took baby steps towards eliminating it altogether, but in all honesty, it will never go away; the poor will always need help; it is how much the government gives that we need to worry about.

What’s going on in the present day is actually a lot easier to comprehend than it is made out to be. The economy is suffering from a president that spent far too much money on fighting overseas and trying himself to reduce the deficit. Toxic investments were bought, and, as it happened, burned through money like it was gasoline. Now here we are, still in debt, the new president attempting to tax the living daylights out of those who actually make enough money to get by in a fast-paced lifestyle, in an attempt to help those who have lost everything due to large investment firms’ mistakes that were attempted to be fixed by the government. In 2009, the dollar’s exchange rate is at an all-time low, oil prices are rising, taxes are going up on everything, inflation is rising, and the unemployment rate is at its highest since the Great Depression. The people who are able to spend are very limited as to what they can actually let go, because a lot of their expendable income goes towards paying taxes. Businesses are suffocating, the real estate market, as well as the retail sector of American life, are getting stabbed by the knife of unemployment, and getting a loan nowadays is starting to become harder than finding a Ferrari Enzo for sale. History repeats itself; things weren’t as bad, but were somewhat similar just about the time Reagan took office. The only difference is that Reagan did something to actually change the economic system—he didn’t just promise “change,” and then tax the people who used the capitalist system, like our friend Brian, to their advantage.

Of course, there has to be a trade-off. Americans expect certain services from the government, but they also hate paying taxes. There needs to be some kind of balance between the amount of money that we as Americans can keep, and what the government is allowed to take in order to support this society’s infrastructure. Instead of increasing the income tax, why not lower it, if not eliminate it altogether? But wait, how will the government make any money? Instead of directly taking money out of everyone’s pockets, the best way to go about doing this is to add taxes onto everything that we buy. Whether its food or a car, the taxes will go up. This way, people will be able to keep their money, but the government will still be able to have a steady stream of money coming their way. They could also cut international aid by a very small percentage and put that towards our domestic issues. This way, everyone will be happy.

A Centrist Approach to Healthcare Reform

SethRosenstein — Mon, 16 Nov 2009 12:08:55 -0500

It is alarming to most Americans that a significant portion of the population has no access to health care besides emergency care. When comparing the amount of citizens with health care insurance in the United States to the number of citizens with health care insurance in other highly industrialized nations, the numbers suggest that the United States has become a below average country in that regard. The healthcare reform package being pushed by President Barack Obama and the democratic-controlled Congress champion the fact that 96% of Americans would be covered by health care insurance. However, little attention is paid by lawmakers to the overwhelming cost of this health care reform package and the need to control health care costs in general for both federal programs like Medicare, Medicaid and S-CHIP, as well as for the private sector.

When assessing the American health care system, many people believe that our system is the best system in the world. It is true that many major advances in the health care field in modern times have originated in the United States. It is also true that many Americans find themselves uninsured and without access to preventative and catastrophic care. In addition to an absolute lack of access, many Americans have health care insurance that is not comprehensive and does not include all forms of health care. According to the National Coalition on Healthcare nearly 47 million Americans, or 20% of the population under the age of 65 did not have health care insurance in 2008. While many people are offered health insurance in their workplace, they are unable to afford their portion of the premium. With an annual increase of inflation at 2.5% and the health insurance premiums for small workplaces increasing on average 12% percent annually, employers are indirectly discouraged from providing their employees access to health care insurance.

A number of ways to reform health care in the United States have been proposed by politicians from both sides of the aisle. The “America's Affordable Health Choices Act of 2009” was passed in the House of Representatives on November 7, 2009 by a 220-215 margin. This bill was introduced by the Congressional Democratic leadership and was passed with the support of only one Republican member. Prior to the legislation’s passage, the Congressional Budget Office (CBO) provided its non-partisan analysis of the bill. Without taking into consideration and modifications or amendments to the bill after July 14, 2009, the CBO found that enacting the bill would “result in a net increase in the federal budget deficit of $239 billion over the 2010–2019 period.” The CBO also found that the projected 10-year cost of the bill’s insurance coverage provisions would be approximately $1,052 billion. Considering that America’s national debt currently stands around $12,000,000,000,000 and that America’s foreign debt and budget deficits are soaring, any American does not need a degree in economics to understand that such spending is detrimental to our economy and long-term financial standing.

It is difficult to imagine a bipartisan solution to health care passing either chamber of Congress in the current political climate. Conservative politicians are pushing for a bill that has significantly less government intervention and that seeks to create market-based solutions for the problems that plague health care today. It is my belief that a centrist and bipartisan plan would solve a number of the problems faced by Americans while keeping the federal budget and deficits under control. First, I propose that Medicare be extended to any Americans wishing to join the program. Individuals wishing to participate in Medicare would pay an insurance premium set by the federal government. In the case of Americans who are unable to afford such an insurance premium, these people would pay a premium based on their annual income. Second, those Americans not wishing to join Medicare would be given the option to purchase their own privately-purchased insurance or the option to buy into a group policy coordinated by the Department of Health and Human Services. The group policy would provide citizens with greater bargaining power and lower premiums. Third, the government would establish a national system of electronic medical records. A similar system is currently in place in the Veterans Administration health care system. According to public-policy researcher Dr. Richard Hillestad, if 90 percent of hospitals and doctors' offices participated, approximately $80 billion would be saved annually.

My fourth proposal is to require private insurance companies by law to not discriminate against people with pre-existing conditions. Companies will not be able to avoid covering such people. This would eliminate the problem of many people losing their health insurance when changing jobs due to conditions that would have previously kept them from getting insurance with another insurance company. Fifth, I would create legislation that allows for the importation of pharmaceutical drugs from other nations with strict regulatory oversight. This would reduce costs and create significant competition among both domestic and international pharmaceutical countries. My sixth point is to allow and encourage the purchasing of private health care insurance across state lines. This would increase competition and lower the price of insurance premiums. In addition to buying across state lines, insurance plans should be portable. Rather than having people change insurance plans when changing jobs or moving across state lines, Americans would "own" their policies. This would give insurers an incentive to make more investments in prevention and in managing chronic conditions.

In a time of economic trouble and an extremely large federal budget deficit, it is my belief that the United States cannot afford the health care reform that has been proposed by President Obama and the Democratic Congressional leadership. As some of my proposals are based on concepts created by the Republican-backed health care reform package and have not yet been evaluated by the Congressional Research Service, it is difficult to place an approximate figure on the amount of money that could be saved by implementing my proposed reforms. While a dollar amount cannot be placed on my proposals at this time, I have created a plan that would allow for significant health care reform, yet allows for significant reduction of the federal deficit instead of increasing it.

The United States Economy In 2009

dsbarger — Wed, 29 Apr 2009 13:55:37 -0400

The United States economy in 2009 has reached its most precarious condition since the Great Depression of the 1930’s, and between a balance-of-payments deficit, current and capital account deficits, and a negative balance of trade, the sounding of the alarm cannot be ignored any longer. The causes of these developments are various and deep in the globalized economy, however, many of them began when President Nixon unilaterally decided to float the dollar’s exchange rate in the international currency market in 1971. By 1973, a system of flexible exchange rates had taken over, adding a significant amount of financial liquidity to the international economy. The growth in markets for borrowers, investors, and speculators ushered in a new economic order characterized in part by increased interdependency among states and businesses. An increase in the quantity and speed of capital flows brought tremendous economic growth throughout many areas of the world. The increase in liquidity offered the ability to buy now and spend later. This blessing in disguise has been over-exploited throughout all levels of society and all throughout the world, from some of the poorest individuals to the federal government of the United States. In order for the global economy to make a turnaround, the federal government has a duty to reverse its trend of limitless spending despite the monumental payments it currently makes for Social Security, Medicaid and Medicare, and national defense.

The largest portion of government spending (21.5%) for the fiscal year 2007 was Social Security at $586.2 billion. Without a doubt, the government must keep its promise to provide for the retirement of its workers, even if it requires raising taxes. If taxes are raised, benefits should also be cut down so that they are received only by those in the greatest need. To accomplish a need-only Social Security system, the age requirement for Social Security benefits should be removed and replaced with a maximum income standard, thereby trimming excess spending on those who are or will be relatively well-off in their retirement.

To reduce spending on the second largest government expenditure (20.9%), Medicaid and Medicare, the United States should pursue a comprehensive reform of its health care system. The reformation should value individual choice over an obligation by the state to pay for medical care. One viable system that fits these parameters is a medical savings account which would decrease medical expenses and extend coverage to a greater number of people. A combination of voluntary and required medical savings accounts is the best route to decreasing the government’s role in health care and facilitating an increase in the private sector’s role. By requiring employers to cover more of their uninsured workers, medical care can be extended at a minimal cost to the federal budget.

The third largest portion of government monies (20.2%) was spent on national defense in 2007. Although the state has a preliminary duty in providing national defense, it should also be reformed. The political, economic, and military elites of the United States need to re-envision their foreign policy under a leader who believes that defense can be less offensive. Under well-guided foreign policy, the U.S. can reinvest certain defense monies into other industries, such as the development of alternative energy needs and fuels. Additionally, some defense funds could be reinvested into aid programs which could positively reinforce the public image of the United States and reduce the need for a $552.6 billion annual war budget.

Spending more on government programs than is collected through tax revenues is a serious problem that can only get worse with the oncoming retire of the baby-boomers. Throw in the fact that we have reached the limits of borrowing, and the gravity of the situation becomes quite apparent. Borrowing from foreign investors and continuing to print money are unsustainable practices that the United States must seek an immediate end to. These dire times demand that we follow a new path in our approach to the national debt and federal spending. Deficit spending should be made illegal at the state and federal level except in response to natural disasters or wars. If borrowing becomes unavoidable, the government should be encouraged by its citizen to borrow and spend with responsibility. Perhaps this could be accomplished by creating budgets for periods of greater than one year and building a system that creates more transparency in government spending to foster public trust through accountability.

Regardless of whether or not the solutions proposed in this paper actually turn the economy, excessive government spending is going to affect Americans for years to come. The Government Accountability Office (GAO) reports that if nothing is done to alter the current structure of government spending and taxation, the federal government will only have enough money to pay for interest on the national debt and entitlements (Medicare, Medicaid, and Social Security). This means that by 2040, the federal government will not have enough money for discretionary spending, which typically buys services that are not enforced by legal requirements, like the postal service, infrastructure (roads and highways), national parks, and national defense.

If no further limits are imposed on federal spending, life will begin to change quite drastically for Americans in the future. Families will spend more time at work and more money on health care. In this economic climate, saving will become very difficult if not impossible. Many students across the nation would have to end their academic and career dreams prematurely with the end of readily-available student loans. Local and upstart businesses would likely see a similar fate due to the end of easy borrowing. Capping this whole bleak situation would be rampant taxation to account for an increasing interest on the national debt. It is safe to say that the viability of future generations depends on the speed and planning we employ to confront the problems of the debt and deficit today.

The Economy News Today: Director's Cut

cthen — Thu, 23 Apr 2009 14:42:16 -0400

Emporia State students hit the streets interviewing America's Heartland on their views on the economy, Social Security, and the national debt. One camera to view them all, nine students to find them.

Barometer of the National Debt

acourtne — Thu, 23 Apr 2009 12:04:01 -0400

I wondered how many people actually knew what the national debt was. How can we, as a nation, fix something that not everyone knows or thinks they don't need to know?The first half of the video are answers to my question - what is the national debt. The last half of the video is an exploration of ideas on how we can pay down the debt.

Facing Up Essay Contest

Polly — Thu, 23 Apr 2009 11:32:28 -0400

As of April 5, 2009, the federal budget deficit is $11.1 trillion dollars while the national debt is $8.4 trillion. This is a total of $19.5 trillion dollars. The areas that cause most of this debt include and are not limited to the Department of Agriculture, Veterans Affairs, Department of Defense, Health and Human Services and the Social Security Administration which is not part of the Federal Budget general fund. There has been a U.S. deficit as far back as 1969 when Congress started spending more money than their income. Congress needs to inquire about what circumstances arose that put a deficit on the federal budget. Will they do that? Probably not.

In my opinion, there are certain programs that I feel are unnecessary. One is the NASA program. Going to the moon was impressive but I really don’t think further space travel is necessary. Why do we have to be in competition with other countries with the “Race to the moon”? Second, we should use our own natural resources such as oil, wind, natural gas and solar power. We have plenty of oil reserves in and around the United States. Wind can be used for energy as long as it is stored effectively. We don’t have to pay for wind. Solar power is also free. Natural gas is rather expensive because it is so regulated. If we use wind and solar power the only situations we really need to do is regulate it and to store it. These types of industries would only stay in the United States and would benefit only the United States. Other countries would eventually catch on and we would get credit for the initial planning and implementing of these energy resource plans. Other countries need to learn how to manage themselves with better resources.

With regards to the Department of Defense, the President needs to stop the war and let the people in other countries fend for themselves. We should not try to democratize the rest of the world. We get blamed for other countries problems when they don’t get what they want or need. We need to protect our own borders and legal citizens within those borders. We also need to have state funding to implement our State Defense Forces. Health and Human services should be ulitilized differently. I have heard and seen first hand, the abuse of the system. Better regulations need to be implemented and a more careful watch of how and what clients of this system are using Federal and State funding. It should be more difficult for people to get funding. In my opinion, Social Security is a Ponzi scheme.

I honestly feel that a large part of the federal deficit can be decreased if Congress looked at the present Federal and State prison systems. It should not cost the American taxpayers one cent to take care of convicted criminals. We pay for their clean clothes, three square meals a day, medical exams and treatments (some of which cost as much as $7,000 a month in free medical care to them), free transportation, free room and board, free entertainment with HD television and a full service gymnasium. They even get a free college education. What is wrong with this picture? I would like these things too but I have morals. Why does it cost the taxpayers more to execute a prisoner than to pay for life in prison of an inmate? I am astounded with the prison system. There should not be a death row. If some criminal confesses to a crime, they should immediately be executed. If a criminal does drugs, his/her hand should be cut off. If a criminal rapes someone, they should be castrated or be permanently sewn shut. I know this sound cruel but something needs to be done drastically to detour people from criminal acts. I also understand people are against capital punishment. Maybe they don’t see the whole picture of the prison system and how much money each inmate costs the American taxpayers. I truly feel again, that much of the deficit could be decreased if we had a decline in the prison community. At least it would be a start. If a person gets life in prison, it means life in prison with no chance of parole. Don’t give someone 130 years. Just say life. If you give them 130 years, it gives them a chance for parole so they can go out and continue their criminal life. The federal government needs to take care of this quickly. I also much add that 85% of the prison system is African American. I am in no way racist. I am just stating a fact that much of the poor areas of the United States involve African Americans and that some of this money from the prison systems could be utilized to help African Americans with programs to keep kids in school and off the streets. There can be after school programs with tremendous incentives for college education and job offerings to students with excellent GPA’s. The problem is, to get these programs initiated without being corrupted by money laundering and other criminal acts.

Congress also needs to take a look at taxing more on alcohol and tobacco. Make it much harder for people to afford these commodities. Also, the federal government needs to increase sanctions to other nations for importing goods from other countries.

Congress will continue to spend taxpayer’s money unless we as a nation unite together and voice our dismay against their actions. The first thing we need to do is contact our state representatives. We need to understand that citizens do have a voice. People are getting tired of being taxed and not knowing where their money is going.

Intergenerational Perspectives

skloiber86 — Thu, 23 Apr 2009 11:31:57 -0400

It’s amazing to see and hear the similarities and differences we find over different generations.

Examining the Federal Gasoline Tax: Increasing Is Not The Question, But The Answer

MeganHenry — Thu, 23 Apr 2009 11:30:14 -0400

When considering an increase in the gas tax, some people may shudder when reminiscing on gasoline costs rising to four dollars a gallon this past year. But in reality, an increase in the federal gas tax is really not too devastating since it has not increased since 1993 (Buechner, 1997). The tax then and now remains at 18.4 cents per gallon. It is not a question that the gasoline tax needs to increase; the question is how. I have taken a look at what a normal increase in the gas tax would do and compared it to other options, including a tax per mile driven and what is called a "net-zero" gas tax. Regardless of which one we choose, it is obvious that there needs to be a raise in the gas tax.

The Highway Trust Fund was established in 1956 and was created to allocate funds for the interstate highways (Buechner, 1997). These revenues are collected from a portion of the gasoline tax. In 1997, almost 84 percent of these revenues were distributed towards interstate highways (Buechner, 1997). Over 6,000 earmarks diverted billions of dollars away from investments in basic infrastructure and force states to divert resources away from pressing transportation needs (Strom, 2007). David Strom wrote an article where he thinks we should eliminate the federal gas tax to put citizens in control of how transportation dollars are spent (Strom, 2007). Congressman Fred Thompson agrees that a tax increase on top of state and local gas taxes is financing infrastructure repairs that the states do not even determine which infrastructure problems are their priority (Thompson, 2007). Thompson argues that the problem is not necessarily the tax, but rather the politics around the funding process (Thompson, 2007).

Since people are trying to drive less, the current tax is insufficient to fund road, bridge, and transit programs (AP, 2009). President Obama has expressed concern over this disconnect and the current economic climate and should be concerned about hurting consumers and slowing the economy. His fears are legitimate, however, a New York Times/CBS poll in 2006 showed that Americans would support higher gas taxes if they knew what the money was being used for. One example given was if it was spent on reducing global warming. Another was if it would reduce our dependency on foreign oil (West, 2006).

As people start to drive more fuel-efficient cars, a suggestion to battle the unreliability of the gas tax is by taxing by the mile by using GPS chips to track miles driven to determine the amount owed (Johnson, 2009). This method has been compared to using electricity in your home; you turn it on and get charged for when it is on (Johnson, 2009). In an article by Joan Lowy, she suggests it may decrease the incentive for people to buy fuel-efficient cars if they are being taxed at the same rate as gas-guzzlers (Lowy, 2009). Since this is only being discussed state by state, my question is what happens when you are driving cross county or just into other states that do not have a mileage charge? The tax is considered to be environmentally friendly by encouraging motorists to drive less (Lowy, 2009). Another concern I have is that this method is extremely intrusive. The government would know exactly where you are at all times. If people were livid about their phone lines being tapped, I imagine they would not be too thrilled about this method either. Not to mention the need to create another department, which then also needs to be funded and seems to worsen our economic problems.

In terms of going down the line of environmentally friendliness and less driving, another idea is offsetting the gasoline tax increase by lowering federal income taxes. This would also reduce gasoline consumption but not have a tremendous financial impact on consumers(West, 2006). Charles Krauthammer, contributing editor to the Weekly Standard, wrote an interesting article on this concept, also known as the net-zero gas tax. He points out some very attractive and strong comments, including the fact that Britain has a tax that is nearly four dollars per gallon, which is more than 20 times our gas tax. Politicians fear approaching this, and avoid this like it was thin ice. However, Krauthammer also points out that during a time of a recession, taxing does not seem ideal. Some benefits of taxing that he is in favor of are making us less dependent on oil exporters and a gradual shift toward fuel-efficient cars. Reducing our gas consumption can reduce oil prices worldwide and “put us on the road to energy independence” and is a “desirable national good” (Krauthammer, 2009).

The idea of a net-zero gas tax is extremely appealing to me. Next to all of the options mentioned, I believe this would have the most benefit especially relevant to our current economic environment. Krauthammer implies that using a net-zero gas tax is time sensitive. He points out the fact that we had a historic high gas price fall almost three dollars to its current level. The net-zero gas tax proposed by Mr. Krauthammer would increase the federal gas tax by one dollar, and at the same time the FICA tax would be reduced by $14 a week. This reduction in the payroll tax is based on the studies that show that the average gas consumption for the consumer is roughly 14-15 gallons per week. Thus, “the average driver comes out even.” (Krauthammer, 2009). He argues that this is simply transferring money and the government does not gain revenue (Krauthammer, 2009). The net-zero gas tax also puts us in control by putting money back into the consumers’ pocket; it is simply a wash.

Senator Richard Lugar wrote a piece for the Washington Post and agreed in cutting the payroll tax, which disproportionately affects the lowest-paid employees, so workers would see extra money every payday (Lugar, 2009). Also, a significant increase in the gas tax will be more likely to decrease consumption and change SUV sales. As we saw, between November 2007 and October 2008 the United States experienced the largest driving decline in history (Krauthammer, 2009). While those reported they would be more supportive if they knew what it was going toward, why not combine the net-zero gas tax with less earmarks and a defined revenue distribution.

Not only could the gas tax be going toward environmental considerations, but also the change in behavior due to the increased gas tax would also be beneficial in the long run by reducing our demand, and then affect other countries worldwide. Americans sent nearly $430 billion to other countries in 2008 for the cost of imported oil (Lugar, 2009). Krauthammer illustrates how the regimes of Russia, Venezuela, and Iran will be hurting from our lack of dependence on their production of foreign oil and it would not be coming from U.S. defense dollars or “the risk of a single U.S. soldier” (Krauthammer, 2009). Senator Lugar concurs, and states, “those hundreds of billions should be spent to build a new energy economy here, not shipped to dangerous regimes overseas.”

To reiterate, the key benefits of a net-zero gas tax are that it is revenue neutral and not punitive to the consumer since the increase in the tax is offset by the reduction in payroll tax. It encourages the market, not the government, to modify products to more fuel-efficient vehicles, while also allowing us to further develop our own natural resources. The nation defense measures are also a large part of this. It takes countries like Russia and Venezuela who depend heavily on oil revenue and puts them on their knees because they cannot meet budgetary needs and keeps them from meddling elsewhere. This will humble OPEC because the U.S. consumes 25 percent, making us a swing nation that can hurt others when we reduce consumption.
Since an increase in the gas tax seems to be inevitable and moving towards more environmentally conscious actions is also of concern, I believe Charles Krauthammer’s suggestion for a net-zero gas tax is the most beneficial. Hot issues such as climate change and environmentally friendliness, national security and economic costs of foreign oil make the net-zero gas tax option extremely appealing. It combines all of these into one simple solution, and what better time to do it than during a recession when drivers will get money back into their pockets. There would be no need to create another department to keep track of the GPS chips and miles driven, no need to create a disincentive for fuel-efficient cars, and no need to raise the fuel tax with an undetermined funding destination.

Works Cited

Buechner, William. "History of the Gasoline Tax." American Road & Transportation
Builders. ARTBA.

"Commission Urges 50 Percent Hike in Fuel Taxes to Fund Highway Construction." AP [Washington] 1 Jan. 2009.

Johnson, Glen. "Massachusetts may consider a mileage charge." AP [Boston] 17 Feb. 2009.

Krauthammer, Charles. "The Net-Zero Gas Tax." The Weekly Standard 5 Jan. 2009: 17-21.

Lowy, Joan. "Panel: Raise gas tax, charge drivers by ile." AP [Washington] 27 Feb. 2009.

Lugar, Richard. "Raise The Gas Tax." The Washington Post 1 Feb. 2009.
.

Strom, David. "Eliminate the Federal Gas Tax." Townhall. 04 Dec. 2007.

Thompson, Fred. "The Gas Tax." Townhall. 13 Aug. 2007.

West, Larry. "Americans Would Support Higher Gas Tax to Reduce Global Warming." About.com. 2007.

National Deficit and Debt: How it will affect me

crcooper — Thu, 23 Apr 2009 11:26:01 -0400

As a sophomore at Fort Lewis College, I have to wonder how the National Deficit and Debt will affect me not only currently, as a student, but also in the future, as a prospective home buyer. As a student I am concerned about student loans and the interest rate that is placed on these loans as well as the availability of grants and scholarships

With the new stimulus package, applying for financial aid would be easier as well as the amount of money received from grants will be greater. Student loans would also be controlled by the government and de-privatized. Currently the APR interest rate ranges from about 4% to nearly as much as 15%. Considering that tuition cost alone currently is around $5,000 per year for Fort Lewis College alone, to take out a loan to cover these expenses could eventually end up costing from $5,200 to $5,750 to pay back for every year of college attended. Now adding in room and board and the total that needs to be repaid is somewhere around $13,000 a year. With the new stimulus package, the Stafford Loan interest rates would decrease from 6% to 3.4% by 2012. The interest rate would then increase to 6.8% in 2013. Using these rates, the amount to be repaid would decrease from about $12,300 per year of college attended to $12,000 per year of college attended. The cost would then jump back to around $12,400 to be repaid for every year of college attended. Granted that a college education will help me attain a hirer paying job to be able to pay back these expenses; that high paying job is not a sure thing in these economic times.

The ever surmounting national debt has placed the job market in a very questionable area right now. As national debt increases, the ability and willingness of companies to hire a new graduate like me is questionable. Since I not have the specific on the job training needed for that specific job, the companies that are hiring are more likely to hire someone with more experience, that does not need to have time (money) wasted on them to train, and are more willing to take a pay cut.

Currently, I am fortunate enough that the scholarships and grants that I have received have covered my tuition costs. Since I am still living at home, although I still pay rent and buy food, my room and board costs are not as great as they could be. When the scholarship and grant money runs out, however, I will be forces to take out these loans which I will have to pay back eventually.

The Time is now For the Value Added Tax

KristopherKagan — Thu, 23 Apr 2009 11:23:49 -0400

Introduction

Today’s economy is so bad that it is beginning to resemble the Great Depression. However it is not the next Great Depression because the changes brought on from Great Depression has prevented the US economy from entering another Great Depression. If it was not for the changes in regulation, taxes and the creation of social security after the Great Depression we would right now be in a depression. The vast changes made during the depression are the same type of changes that are needed now to prevent the next great economic crisis 75 years from now. This is our chance as a country to reset our economy and fix what is broken. That does not mean just fixing what is broken now (Financial Sector) but fix what will be broken in the future (Social Security and Health Care).

We can not just fix the current problem by pumping more and more money into the economy without taking in more money. If the government keeps spending more and more money then it will not be the banks going bankrupt but the U.S. government. If that would to happen then we really will be in a depression. In order to offset the current spending levels, we must begin to raise more funds in terms of new taxes. This is a country that despises and hates taxes. Its stubbornness to change with the times has been fatal to the U.S. economy.

Up until 1913, the United States had very few taxes. The only taxes that it really imposed from time to time were internal taxes, sales taxes and sometimes an income tax (Tax Foundation). In 1913 however the 16th amendment made the national income tax permanent. The income tax does not look like it does today until the end of World War II (Tax Foundation). Since World War II we have seen the rise of taxes. Such taxes like the national income tax helps raise revenue for the federal government, states sales tax help raise money for the state government, Social Security, Medicare and Medicaid tax help fund themselves. But what is funding general health care? Nothing! The United States government needs a Value Added Tax in order to fund health care. With government spending and health care cost reaching new horizons, the national income tax can not handle the massively growing debt.

What is the Value Added Tax:

The United States can not relay on just the income tax to raise revenue. It needs a new system that has worked in other developed countries and that system is the Value Added Tax. The value added tax according to the European Union is

“Value Added Tax (VAT) is a general consumption tax assessed on the value added to goods and services.It is a general tax that applies, in principle, to all commercial activities involving the production and distribution of goods and the provision of services. It is a consumption tax because it is borne ultimately by the final consumer. It is not a charge on companies. It is charged as a percentage of price, which means that the actual tax burden is visible at each stage in the production and distribution chain. It is collected fractionally, via a system of deductions whereby taxable persons (i.e., VAT-registered businesses) can deduct from their VAT liability the amount of tax they have paid to other taxable persons on purchases for their business activities. This mechanism ensures that the tax is neutral regardless of how many transactions are involved.” (http://www.eurunion.org/legislat/VATweb.htm))

The value added tax is essentially a sales tax, except that it's charged at each stage in the development of a product instead of at the moment when the product is sold Through each stage of production when value is added to a good or service, that value is then tax (Tully). A value added tax is a little different than a sales tax because according to the World Bank “The value added tax, in contrast is neutral in this respect. The total accumulated tax, down through the retailer is the same for every dollar of retail price, no matter how much the values added that make up this dollar are distributed among the stages of production and distribution” (Carl Shoup 141). The VAT is more desirable then your typical sales tax because being neutral makes it so not one person bears the entire cost of the tax. The value added tax is collected on goods in each business transaction. Under this concept the government is paid tax on the gross margin of each transaction (Carl Shoup).

It allows for a country to raises revenue every time an item is purchase. Our country is in major debt and we need to raise money. The value added tax is a way to raise that money. It can at times be considered a voluntary tax on people. If you don’t want to pay the tax then save your money rather then spend it. We are currently in an economic crisis because many people over extended themselves by spending more then they could handle. A value added tax encourages people to save more. There are many benefits and criticisms of the value added tax. Finding a collaborative plan to balance them both is essential to making a tax system work. In this country we have a social security system that is broke, and a middle class that takes on a huge financial burden for this country. The VAT is not meant to end all of our problems but is meant to put this country back on track.

What will the VAT pay for:

Most importantly the VAT is a way to control and pay for the ever growing health care cost in this country. By establishing a system in which helps pay for health care, we then make it possible to change our current health care system. Before doing a complete overhaul of the health care system which I believe is needed, we first must find a way to finance it. Health care is currently 17 percent of the America’s economy (Micheal Leavitt). But that number will increase drastically in the future. According to Professor Yarrow, health care costs are $2 trillion dollars. A lot of that cost comes from Medicare and Medicaid. The problem with these programs is not just today’s cost but their future cost burdens. Medicare costs are raising 9-13 percent each year. In 75 years it is projected that Medicare will have cost $38 trillion dollars. Medicaid cost may be smaller then Medicare but it is still a huge cost on health care (Yarrow). The goal here is to fund a health care system that works. I am not here to debate whether or not to keep Medicare or Medicaid. I use them only as example to show the increasing burden that health care cost will have on the future of this country.

The VAT will not be used to fund Medicare or Medicaid because allowing them to grow at the rates they are growing will bankrupt this country. They need to be reformed or eliminated so they are more efficient. However, the VAT will be used for general health care. If health care is still privatized then it can be used to give companies assists in paying health care cost to their employees or it will be used to pay for an universal health care program. The idea of instituting a VAT to fund health care was first visited in this country by the Clinton administration in 1993. According to Steven Greenhouse “a 5 percent value-added tax would, if placed on all goods and services, raise more than $100 billion a year. At that level, such a tax not only would handily underwrite the Administration's health plan($90 billion) but would also be a potent tool to cut the budget deficit”( Steve Greenhouse). The VAT would have paid for the health care system proposed along with having extra funds to cut the deficit. The booming economy resulting in surpluses, the failing health care plan, the threat to states sale tax and the burden the VAT would have on poor people put an end to the VAT discussion. Times are different now and we now know the facts about how costly health care will be. According to Roberton Williams of the Tax Policy Center, a non-partisan research institute, “Today the VAT raises almost half of the total government revenue in France, and a similar share in most of the developed world” (Tully). Because of the vast impact it has had on other countries, revisiting the idea of a VAT is now essential.

Most of the VAT on goods will go to help cover the cost of health care. But for certain goods, the VAT will help fund other programs. One possible example of this is the funding of alternative energy solutions. A VAT on oil will have two beneficial results. It will raise the price of gas to a level in which alternative energy solution are more viable. If gasoline is only 2 dollars a gallon then people are not going to seek alternative energy solution. Oil is still the cheapest form of energy. The problem with oil prices is that they are very flexible and determined by OPEC. At any moment we might see oil production stop and gas price shy rocket. When this happens, the rise of oil prices causes the whole economy to slow down. In order to prevent this we make oil prices near the prices of alternative energies in order to make those alternative energies solutions a more viable option. By doing so we diversified the effect oil prices have on this country. The second thing the VAT will do is provide an alternative energy fund from the VAT collected on oil. This will go to finding cheaper and more efficient energy solutions. Like our health care burden this country faces, the dependency we have on oil is just as threaten.

In order to have that lifestyle that we all dream about, we must be healthy. The VAT has the potential to fund general health care for Americans. The government has an obligation to protect it citizens from harms way. By allowing people to be treated when they are sick is included in that protection. I did not talk about how to actually reform health care, whether to have vouchers or universal health care, because Samuel Session says it best “Those concerned about the direction of U.S. health care should start putting the finance horse before the benefits and delivery cart”
Benefits of the VAT

A couple of the benefits of the VAT are that it provides a revenue stream for the government to pay for universal health care program. The VAT is necessary according to Shawn Tully because “A VAT may be unavoidable in the United States. The reason is that spending is rising far faster than the revenue that can conceivably be generated by the current tax regime” (Shawn Tully). Currently our tax system is project to remain relatively flat into the future accounting for 18%-20% GDP while spending is suppose to raise to 24% IN 2030 AND 28% in 2050 (Tully). If we do not adjust our revenue intake then we are looking at huge deficits. Borrowing will be hit with unworkable interest costs. The VAT will allow for the “budget to stay afloat” (Tully).

Why not just raise the income tax? Raising the income tax is not possible because there is only so much you can tax people before their incentive to work and production begin to deteriorate “All economists agree that when top income tax rates get too high, Americans will work, save and invest less. Tax collections would increase far more slowly than rates, and eventually level off completely” (Tully). According to Tully in order to offset the increase gap between revenue and spending, income taxes would have to be raised 53%, in order to raise the $870 billion need to have an extra 2% of GDP. As a consequent of doing this, people would be less inclined to work which would mean income levels would begin to go down resulting in decreasing revenue. In order to meet the increasing spending levels, a VAT is needed.

Another benefit of instituting the VAT now is actually by many considered a huge problem. Implement the VAT it is said to “be difficult to set up, expensive to administer and hard to make equitable, because it would hit poor Americans hardest …and Deputy Treasury Secretary Roger Altman acknowledged recently that it could take two to three years to get a value-added tax up and running” (Greenhouse). This is an advantage right now because government is spending so much money as it is that getting such a program approved is not as difficult. The cost of setting up it and running is small relative to the trillions the government is currently spending. Having it take a couple of years to implement might be a good thing. It is going to take a few years to get out of this financial crisis and when we do then the VAT will be waiting. This is our opportunity to reset things and change our dismal future. It actually looks like right now is the best time to implement the VAT.

By having to wait to implement the VAT allows us to analysis the effect the VAT has during an economic crisis. Currently we are seeing countries in Europe cut their VAT levels across different industries. The European Union has allowed VAT cuts. New cuts have been seen in Ireland’s hotels and France’s restaurants industries (Adam Cohen). To many critics of the VAT, this shows that the VAT might not be working properly. That may be true to some extent however like interest rates, the VAT has the same versatility to be adjusted. The VAT will give the government another tool for stimulating the economy along with changing interest rates and controlling the money supply. And by watching how changing VAT levels affect European countries economy will allow us to know how to control VAT levels in time of prosperity and in times of recession. We have the advantage of observing the effects of the VAT before we actually implement it. So in 3 years when it is ready, we would have already tested it out (by watching how it handled the recession in Europe) and we will be able to make the necessary changes to have a successful program.

The VAT is better then a sales tax because the VAT is already included in the product. The price of the good already has the VAT already in it, while a sales tax is added on at the time of purchase. Because of this people are not as angry towards increases in a VAT because they really do not see it in real nominal terms. People consider the VAT as part of the manufacturing cost while they see the sales tax as just a tax. Another issue is that by having a national sales tax and raising the sales tax, people will be more inclined to buy things over the internet or pay with cash (Carl Shoup). If you have to have a tax, the VAT is considered the least destructive.

The finally benefit is that the VAT is suppose to actually help protect domestic businesses from foreign industries. Currently America does not have many tariffs. The U.S. has brought down it tariff walls. This is true for Europe as well but they have a VAT on all imports. So any good imported into another country has to pay that countries’ VAT. In the United States we do not have a VAT so not only are these imports considered cheaper then domestic product, the United States are not actually collecting the additional revenues from these foreign goods. By not having a VAT, the government is missing out on protecting domestic industries and the collection of VAT on foreign imports and also on foreign purchase by foreigners while in the U.S. The reason why domestic industries with the same VAT as imports actually will be better off is because according to Craig Harrington there is a VAT refund for domestic manufacturers who also exports. So the government gives a refund to these domestic manufacturers which they in turn will pass onto the consumer. Thus domestic manufacturers can actually price their good less than its foreign competitor domestically because it knows it will get a refund at the end of the year (econonmyincrisis.org). So again, the VAT will actually make it more appealing to consumers to buy domestic good while at the same time allowing the government to collect more funds from foreigners.

Criticism of the VAT

American hates taxes thus imposing a new tax on them will not be taken lightly. There are many reasons against having a VAT. There are two big reasons for not having a VAT. One is the possible drag on the economy and the other being that it is a regressive tax which means it imposes a heavier burden on low-income than high-income families (Samuel Y. Session).

The reason why VAT slows the economy and also destroys jobs is because it reduces incentive to engage in production and work. When taxes are raised then the supply for a good will go down to offset the cost. Higher production cost makes it more costly to employ people which consequently will cost people their jobs (Daniel J. Mitchell). The VAT is also said to expand the cost of government and tax burden. This may have been true in the past but with the U.S. expanding the cost of government without the VAT it might be possible that the VAT did not actually cause European countries’ cost of government to increase but actually helped counteract that increase spending of their governments. Daniel Mitchell says that “VAT would slow economic growth and undermine job creation. The economic dam¬age caused by a VAT is partly due to the increase in the aggregate tax burden. Additionally, even though it may be less dam¬aging than other forms of taxation, the VAT drives a larger wedge between pre-tax income and post-tax consumption, therefore reducing incentives to engage in productive behavior” (Daniel Mitchell). He does admit however that a VAT could generate substantial new revenue for the federal government and that it is less damaging than other taxes. It is a real concern that the VAT might slow the economy however; the VAT is the best solution. Other tax increase will have even more adverse affects and doing nothing would be even more devastating.

The other main criticism of the VAT is that it is a regressive tax because it imposes a heavier burden on low-income than high-income families. Basically what it is saying is that a 10% VAT on a candy bar will have more of an impact on someone with less income then someone with more income because he has less available income to spend on that candy bar. This is a real concern especially since the current president has stated he wanted to avoid taxing the poor and middle class whiling hitting the upper class hard. The implementation of the VAT might contradict this sentiment.

Solution…VAT Versatility

The government is currently setting a terrible example for the American people. They keep on spending without having any means to actually pay for what they are buying. We got into the crisis because people got in over their heads with their spending. In order to spend you need to be able to afford what you are buying. The VAT will allow the government to afford what they are spending. But how does the government offset the problems of a slowing economy and regressive tax? The answer is in the versatility of the VAT. As mentioned before European countries are adjusting their VAT rates during this time of recession. The VAT gives government another way to try to stimulate the economy during a recession while raising revenue during prosperity. It is versatile in the fact that different industries can be tax more then others. So a suffering industry might have a lower VAT then a flourishing one. Right now we might see the auto industry with a lower VAT than the oil industry.

As we can see the versatility of VAT can help prevent a slowing economy but how does it help with the regressive tax problem? There are two possible solutions to the regressive problem and they are a “smart card” and a higher VAT on luxury items. According to Samuel Y. Sessions the solution to the problem include “adjustments to other elements of the tax system could address this problem and have described these adjustments elsewhere. They include income, payroll, and state sales tax cuts and refundable tax credits. "Smart cards" could be used to reduce or even eliminate VAT for low-income purchasers. By incorporating these measures, the new system could be made as progressive as current law or more so” (Samuel Sessions). As mentioned by Samuel Session there are solutions that can take the burden off of lower income families. You can provide them with a “smart card” which would be like a senior citizen card for the poor. Tully provides another solution “One partial solution would be to exempt staples such as food, gasoline or fuel oil from the VAT and impose extra-high charges on yachts and jewelry. To help middle-class taxpayers, the federal government could also send subsidies to tens of millions of taxpayers based on their incomes” (Tully). Instead of trying to get the rich to pay more with an increase income tax, why not just make them pay more for their yacht.

Base on these two solutions we can see that there are solutions to the regressive problem. Having the VAT so versatile allows the government to decide what should be regressive and what should be progressive. I major problem in this country is that people spend their money on things they should not be. The VAT is another way for the government to impose a sort of sin tax on goods that are not necessities. By making food and clothing exempt from the VAT and electronic not, the government can give people an incentive to purchase food and clothing rather then video games. It does this country no good to have poor people buying luxury goods over necessities. The VAT can make it more appealing for poorer people to buy goods that will lead to a better lifestyle

Conclusion:

As a conservative Republican I have been against taxes all of my life. There comes a time when fighting a losing battle is worthless to continue. Instead of trying to get taxes repeal why not focus on getting a tax system that actually works. The VAT, if done right can work. It can help this country pay for the health care system that is needed in this country. It can help improve people’s lifestyles. The government needs to eliminate people’s choices. A person should not be debating whether or not to buy the new iPod over food for their family. The VAT can help make people choose a better lifestyle

Many people see increasing taxes as a threat but I see it as an opportunity for a better life. The difference between Americans and the rest of the world is that we define life as how much money we have while the rest of the world defines life as how happy they are. We look at how much money we can make in a life time to determine how successful we are. It used to take a high school degree to make it but now it takes a graduate degree just to stay afloat. People can no longer pay for education, food or health care. Millions of people are uninsured. People no longer have time to have a social life. They are forced to meet people on the web. People getting marriage in their early 20s is frowned upon while having kids at 40 is not. But if you look on the bright side everyone has a cell phone and a TV. American are basically living the lives of industry workers during the Industrial era with the exception of not working in a factory. In Europe some people make a quarter of what Americans make but have a loving family, free education, vacation time and free health care. It is true America provides you with the possibility to have all the luxuries and money you could ever want but Europe might actually provide you with the stress free and happy life that in the end most Americans are craving for. Will Americans be willing to accept a VAT and less money in order to live a healthier and happier life?

Works Cited

Cohen, Adam. "EU Allows Cut in VAT on Services - WSJ.com." Business News & Financial News - The Wall Street Journal - WSJ.com. 22 Mar. 2009 .
Daniel, Mitchell J. "Beware the Value-Added Tax." The Heritage Foundation - Conservative Policy Research and Analysis. 22 Mar. 2009 .
Greenhouse, Steven. "A Value-Added Tax; It Could Pay for a Health-Care Plan And Then Some, but the Hurdles Are High - The New York Times." The New York Times - Breaking News, World News & Multimedia. 22 Mar. 2009 .
Infoplease: Encyclopedia, Almanac, Atlas, Biographies, Dictionary, Thesaurus. Free online reference, research & homework help. — Infoplease.com. Ed. Tax Foundation. 22 Mar. 2009 .
Sessions, Samuel. JAMA, the Journal of the American Medical Association, a weekly peer-reviewed medical journal published by AMA. 22 Mar. 2009 .
Sessions, Samuel. "Value-added Tax Proposal To Reform US Health Care." Medical News Today: Health News. 25 Mar. 2009 .
Shoup, Carl. JSTOR: The Value Added Tax and Developing Countries. 22 Mar. 2009 .
Tully, Shawen. "A European-style tax? Get ready for it. - Dec. 2, 2008." Business, financial, personal finance news - CNNMoney.com. 25 Mar. 2009 .
"Value added tax -." Wikipedia, the free encyclopedia. 22 Mar. 2009 .
"The Value Added Tax System." Right Democrat: A Mainstream Populist Voice. 22 Mar. 2009 .
Will, George. "RealClearPolitics - Articles - Health Care Costs Keep Growing and Growing." RealClearPolitics - Opinion, News, Analysis, Videos and Polls. 22 Mar. 2009 .
Yarrow, Andrew L. Forgive Us Our Debts: The Intergenerational Dangers of Fiscal Irresponsibility. Yale University, 2008.