62 lines
3.7 KiB
Plaintext
62 lines
3.7 KiB
Plaintext
___ ___ ___
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___|: |___|: \ ___|: \ DizDate: 12/95
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_______\___ \___ \___ ___\_______ WordCount: 446
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«¬¬¬¬¬¬| |: | |____| ___|¬¬¬¬¬¬«
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«¬¬¬¬¬| | |: | |: |¬¬¬¬¬« Subject/Topic is on:
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«¬¬¬¬| |: | |: | |¬¬¬¬« [Proposal to Cut the Budget ]
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----\___|: |\__ |\__ |---- [Deficit ]
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Grade Level: [ ]Grade School Type of Work: [x]Essay/Report/Term
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[x]High School [ ]Informational
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[ ]College [ ]Notes
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[ ]Misc
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ÄÄÄÄÄÄÄÄÄ>ÄÄÄÄÄÄÄÄÄ>ÄÄÄÄÄÄÄÄÄ>Chop Here>ÄÄÄÄÄÄÄÄÄ>ÄÄÄÄÄÄÄÄÄ>ÄÄÄÄÄÄÄÄÄ>ÄÄÄÄÄÄÄÄÄ
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Economics Ch:7/9
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The federal budget is an explosive problem which if not acted upon
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soon, threatens to swallow the entire domestic income. I have placed
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together several decisions that create a minimal impact upon the economy,
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yet reduce the federal budget deficit by 2/3s. The aggregate demand curve
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ultimately will shift, not greatly, to the right as the economy is slightly
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increased throughout my proposal.
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To accomplish this feat, the plan to be presented to Congress in
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January will consist of many revenue increases and some spending increases
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and decreases. This plan will not decrease the entire deficit to a
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positive budget because the impacts of that kind of change could severly
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cripple the economy. Taxes must be raised, yet to offset the taxes, some
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spending must be spent to help profit the economy. My plan is similar to
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the Gramm-Rudman Hollings Law, except these cuts are possible, but it will
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take more than 1 term.
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The taxing that I plan would move the aggregate demand curve to the
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left, as money is taken away from the people. Imposing the Ad Valorem tax
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on energy, increasing the average residential bills by $50 a year would
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reduce the deficit by 25 billion, and shrink the economy by 4 billion.
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Making all entitlements subject to income tax would reduce the deficit by
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74 billion and shrink the economy by 24.66 billion. Basing Medicare
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payments on cost of managed care plans would reduce the deficit by 70
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billion, and shrink the economy by 23.33 billion. Converting Medicaid to a
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block grant in states would reduce the deficit by 54 billion, yet decrease
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the economy. These tax increases will reduce the deficit by 223 billion,
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and through the net tax multiplier (mpc/1-mpc while mpc = .25) the economy
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will shrink at around 70 billion.
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My increased spending shall position the aggregate demand curve back to
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its origional place then move it a tiny fraction to the right, as marginal
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growth would be accomplished through this entire plan. Increasing defenses
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3% in 2002 would increase the deficit by 44 billion, and expand the economy
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58.66 billion. Increasing domestic discretionary spending would increase
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the deficit by 9 billion, and expand the economy by 12 billion. The
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spending revenues would raise the deficit by 53 billion, and through the
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expenditure multiplier (1/1-mpc), will expand the economy by 70.66 billion.
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In retrospect, this plan will reduce the deficit by 170 billion and
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increase the economy by .66 billion. My political cost throughout this
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process would rise to 340, making it difficult to be reelected, but once my
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plan is placed into work, it will reduce the deficit, and keep the economy
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stable.
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