January By John E. The electorate made it clear in November: Congress should cut up the federal credit card and restore fiscal sanity. Road maps on how to do that were seldom mentioned.
Conservatives chant that taxes and government "take money out of the economy" and we need to " cut and grow ," meaning if government spending is cut way back the economy will grow as a result.
Europe's conservatives are also forcing cuts in the things their governments do for regular A paper on the effects of government cutbacks, claiming "austerity" will bring "confidence" that grows their economies.
How is this experiment working out? What are we learning about the effect on the larger economy when government is cut?
What Does Government Do?
Almost everything the government does is because it needs to be done. We can discuss the need for military spending another time. These are all needed and contribute to the functioning of the economy. So if government is cut back and doesn't do something that is needed, then how does it get done?
Or does it just not get done? Either way, the real question we should be asking is what is the effect on the larger economy when our government cuts back on or stops doing needed things?
If you save the "government" a bit of money but cost the economy a lot of money, are you saving money? Or are cuts in government really just shifting and even increasing the costs in the larger economy of doing these things? Who Is Our Government For? In the United States, our Constitution says that government is supposed to be of, by and for We, the People.
The country was established after the colonists rebelled against the aristocracy of England -- a few people who had all of the wealth and power and would not let the colonists have a say in how things were run and who would benefit.
So they fought the Revolutionary War and established a country where "We, the People" all have an equal say, and to "promote the general welfare. So cutting back on government means cutting back on We, the People doing things for the good of all of us. It means cutting back on the things we have a say over.
It means relinquishing the wealth and power that we hold in common to Medicare, For Example Republicans say we need to cut back on what the government spends on Medicare. But if you cut Medicare the health problems of elderly people and the larger problem of fast-rising health care costs in the larger economy don't disappear.
In fact, both problems just get worse. The "Ryan Budget" that Congressional Republicans voted to approve actually converts Medicare into a program that gives seniors a voucher that pays for part of a private medical insurance policy that seniors have to shop for.
From the CEPR explanation: A new report from the Center for Economic and Policy Research CEPRhowever, shows that the [Republican] proposal will increase health care costs for seniors by more than seven dollars for every dollar it saves the government, a point missing from much of the debate over the plan.
In addition to comparing the costs of Medicare to the government under the current system and under the [Republican] plan, the authors also show the effects of raising the age of Medicare eligibility. Repeat, the Republican plan to cut Medicare would cost the larger economy seven times as much as it cuts government spending.
While this might mean government has to pay out less of what is owed to seniors, such cuts would have a negative effect on the larger economy. Social Security allows working people to retire with at least a minimal income.
If this is cut many could not retire for many more years if everwhich would increase the unemployment rate because their jobs would not open up. The same is true as the retirement age is increased -- fewer job openings.
If it is cut, the spending on cat food at local grocery stores and other necessities is reduced by the same amount. And the effect on children of retirees is increased, if they contribute to make up the difference.
This is why cutting Social Security or raising the retirement age only shifts costs onto the larger economy, dragging it down and cruelly hurting our elderly.consumption by buses, improved paper reduction processes through technology utilization, government.
Budget cuts prompt the need for school districts nationwide to examine how their funds are distributed, allowing many facets of the educational system to formulate plans of Education Budget Cuts, the Effects of. The decline of newspapers has been widely debated, as the industry has faced slumping ad sales, the loss of much classified advertising and precipitous drops in circulation.
In recent years the number of newspapers slated for closure, bankruptcy or severe cutbacks has risen, especially in the United States, where the industry has shed a fifth.
In “Defense Spending and the Economy,” Harvard University professor of economics Robert Barro and Mercatus Center senior research fellow Veronique de Rugy survey existing research on the “multiplier effect” of an extra dollar of government spending on GDP to examine the economic impact of changes in federal defense spending.
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Send questions or comments to doi. Preliminary versions of economic research. Did Consumers Want Less Debt? Consumer Credit Demand Versus Supply in the Wake of the Financial Crisis. The Great Recession is the name commonly given to the – financial crisis that affected millions of Americans.
In the last few months we have seen several major financial institutions be absorbed by other financial institutions, receive government bailouts, or outright crash.