Merriam-Webster defines “deficit” as “an excess of expenditure over revenue.” In layman’s terms, this means spending more money than is generated. There is a clear division between liberal and conservative ideologies concerning the deficit. Inevitably, a citizen’s political ideology has enormous bearing upon his or her view of the deficit and the means of solving it. Recent and future policy will definitely include decisions concerning the deficit and deficit spending, as it is an issue heavily debated at present. For instance, deciding whether or not to extend the tax cuts implemented by former president George W. Bush is a current debacle that largely involves the two differing ideas of solving the deficit. Understanding the different solution that each side proposes is essential to cultivating a clear picture of the twenty-first century deficit.
Liberal citizens tend to promote maintaining or even increasing money to welfare programs, regardless of the size of the deficit; contrarily, conservative citizens are inclined to support tax cuts as a means to stimulate business. “The budget debate that is expected to dominate Congress next year” (politico.com) offers an accurate illustration of the opposing remedies; the Democrats in Congress are “resisting any cuts in Social Security benefits” (politicos.com) whereas the Republicans believe in adopting “fiscal restraint” and “capping [federal] spending” (heritage.com). Edward Lazear, an economist, explicates a solution that returns “spending closer to 2008 levels, then limiting spending in the future” (heritage.com). He asserts that the liberal argument “rests on the flawed premise that we can reduce the deficit only by increasing taxes, as if high levels of spending are a given…Americans don’t have to choose between an enormous deficit or high taxes” (heritage.com). The difference lies in each party’s plans for where to allocate the citizens’ tax dollars. Liberal proponents aim to extend this money to welfare and other government programs, as described by House Speaker Nancy Pelosi’s reaction to the Bowles-Simpson plan (2010); Pelosi condemned the plan, declaring that the plan must protect “economic security” by preserving welfare programs designed for dependents such as the elderly, “who are counting on the bedrock promises of Social Security and Medicare” (Politico.com). Plans such as these are certain to fuel the major dialogue in Congress for the next few weeks, as the Bush tax cuts will soon expire, and the Congress will be forced to form a consensus regarding solving the deficit.
The deficit consumes 53.5% of the national GDP, according to the CIA World Factbook estimates from 2009. It remains a contentious subject in Congress because of the varying methods of solving it. Each side will confront the task of prioritizing the programs that revenue must be allocated towards, which is an enormous task. Americans are dependent upon the decision of Congress, as each year the deficit rises. According to a recent Gallup poll, terrorism and the “federal government debt” are tied at forty percent as issues that Americans believe are “extremely serious” (heritage.gallup.com); indeed, a citizen is ignorant if he or she discounts the deficit as an imaginary malady.
I'm digging the blog...it looks rustic :)
ReplyDeleteAnyways, in regards to the liberal viewpoint that spending more money is going to help decrease the deficit...so they think this is going to work out because it will stimulate business? We're in a recession right now (well it depends on who you ask), and i don't think that people are spending a lot in these times. How will it stimulate business (according to their views)? It'll definitely be interesting to see how this plays out though.
@ Carissa- Thank you :-) I like it as well!
ReplyDeleteThe liberal viewpoint does include spending money (or, in other words, refusing to cut funds in certain areas) despite the deficit. This idea has been very popular among liberals since FDR and the New Deal programs, which forever changed the meaning of the words "government spending." Through programs like the Social Security Act, welfare was introduced and has increased steadily since. The issue that citizens have with these developments is that programs such as these are not fiscally sustainable for much longer.
To answer your question: How will it [spending] stimulate business?
A site I found helpful in clarifying this for me is: www.politico.com. Interestingly, here is a story published yesterday that details the developments concerning the deficit: http://www.politico.com/news/stories/1110/45200.html
Basically, liberals aim to reduce the deficit
a) by raising taxes to the "upper class" while protecting the "lower and middle classes"
b) cutting defense and non-defense spending, and raising taxes on "bonds, foreign-earned corporate income, capital gains and dividends, and implementing a cap and trade program to tax companies for carbon dioxide emissions implicated in global warming."
c) leaving every other cent possibly saved to Social Security (paragraph 5 of the article "Jan Schakowsky Offers Liberal Deficit Plan")
"Schakowsky’s [plan] is decidedly to the left – Social Security benefits wouldn’t be touched."
Thus is the belief, at least. I agree- it will definitely be interesting to see how it plays out.
Very nice job on your paper! It seems odd that the Democrats think that spending more money will help to decrease the deficit, if anything it seems that the deficit would increase. Whether or not spending more money will stimulate businesses or not, it is very questionable as to why the Democrats would think of such a thing and how they plan on it decreasing the deficit. Obviously government welfare plans like the Bowless-Simpson plan you mentioned earlier are important and to extend the money to welfares like this one may be very effective and maybe not. I am not sure what the Democrats were thinking but I guess we will see if their plan works or not.
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