Spencer Schulz, period 3 Issue Paper
Throughout history lots of people have owed lots of other people lots of money. No one likes or wants to borrow money, but they find themselves doing so anyway. It’s such a problem that there used to be special prisons just for people who couldn’t pay their bills. Today, like many of it’s citizens, the United States is in debt. We owe over thirteen trillion five hundred billion dollars to various companies and countries. It is the single largest debt in the world. The debt is so large that it’s the equivalent of about 297599.8 pounds of one hundred dollar bills. Therefore, there’s no denying that the deficit is a pretty big issue when it comes to politics. The Republican Party and the Democratic Party disagree on how this issue should be handled.
The Democratic Party believes in cutting spending, pure and simple. They think that the best way out is to keep the taxes steady and reduce the amount of money the government spends very carefully. The Democrats want to halt outsourcing and bring more manufacturing and business back to America. They almost seem scared of big economic players like China and Japan. They’re sort of calling for a kind of anti industrial movement in some ways. The Democrats are blaming the current state of the economy on the bad policies of the Republicans during the Regan, Carter, and Bush administrations. They do have a small point, Republicans are more likely to run up the deficit while in office than a Democrat.
On the other end of the scale, Republicans believe in a free economy, with few restrictions or laws limiting trade. Republicans also believe that increased taxes are the solution to the deficit. Democrats counter this by saying that increased taxes will only hurt public spending. Some Republicans suggest increasing inheritance taxes, as that could lower the deficit up to four trillion. Republicans firmly believe that tax cuts will not increase the government’s revenue. But honestly, the Republican party really doesn’t have a plan for the current economic situation, besides screaming at the Democrats of course. Economists say that simply taxing or reducing someone’s taxes will not impact the deficit in any significant way. This is why attempts to jump start the economy, (Obama’s stimulus package), have mostly failed.
The United States keeps borrowing money to fund programs and to try to improve the economy. So far it is not really working, so it might be better to stop thinking about an economic problem from a government’s point of view and start looking at it from an economist’s point of view. If we increase productivity, we increase revenue, wages go up, people spend more, and businesses earn more. That would be a step in the right direction; unfortunately, members of both parties are not being too keen to cooperate at this time. It’s a shame that the system we created to make sure no side has too much power also allows the minority to make such a hassle for the majority.
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