The Deficit blog

                                                           The Deficit blog


                                      By Justin Winn



               In order to restore economic stability, policymakers must focus on restoring the institutional role of governing. Government can provide a stable environment for economic growth when it can be depended upon to maintain the stability of the currency, enforce and defend property rights, and provide oversight that assures private citizens that their transaction partners in the marketplace are held accountable.This will allow market participants to begin putting their resources back to work in the areas where they are most beneficial.After decades of lecturing developing countries on how to emerge from economic crisis and stimulate economic growth through sound government policies, U.S. policymakers and some economists are throwing out all their advice during the first major crisis test. This is particularly true when it comes to advice on accumulating more and more debt.Economic downturns, while painful, do afford an opportunity to root out waste and inefficient spending both in the public and private sectors. This is because the opportunity cost of making fundamental reforms is lower during downturns.the urgent need for fiscal discipline. But Congress's recent enactment of the American Recovery and Reinvestment Act and the President's proposed budget makes the goals of a sustainable budget and addressing the nation's longer-term fiscal priorities, such as entitlement liabilities, even more elusive. The Congressional Budget Office's recent "Budget and Economic Outlook" estimated the 2009 budget deficit to be $1.6 trillion 4 The Administration's recently released mid-session review from the Office of Management and Budget estimates that over the next 10 years the accumulated deficits will total $9 trillion. 5 This means that the debt held by the public will be a staggering 77 percent of GDP in 2019. If the debt level continues to grow faster than the economy, the U.S. will find that it owes more than it makes.

The first two points demonstrate a commitment to fiscal responsibility and give an opportunity to review the purposes of agencies in light of current needs and changing technology. This will help to increase the level of accountability in both the private and public sectors, as evaluations shine the light on how operations have been conducted. Demonstrating fiscal responsibility also signals a commitment to supporting the U.S. currency, 15 which will reassure America's trading partners.The third point will help restore credibility to U.S. financial institutions. It is well past time to modernize this country's financial regulatory system so that it can meet the challenges of today rather than reflect the structure of a market that no longer exists. The new system should be flexible and encourage the kind of innovation that has helped to provide low-cost financial services to millions of consumers, while also providing the credit that is so necessary for economic growth. It is important that the recent stabilization in the financial sector and other legislative agendas do not change the priority of this reform effort.The fourth, reform of the tax code, should focus on simplification, transparency of the tax burden, broadening the base, and lowering overall rates. Reducing the layers and complexity of the tax code frees up resources that citizens can put to more productive use. The Tax Foundation estimated that in 2005, individuals and non-profits spent six billion hours complying with the federal tax code. 16 This amounts to an additional 22 cents per dollar of tax collected--which means that American citizens paid $1.22 for every $1 that the government received in tax revenue.

Simplifying the tax code and streamlining the collection process would allow taxpayers to save this time and money, effectively giving them more disposable income. Increased disposable income can help people build wealth. Wealth is built by investing in assets. With house prices no longer rapidly appreciating, more productive asset investments might be in infrastructure, energy, health technology, and other assets of the future.Reducing marginal tax rates on income both at the corporate and individual levels increases the benefits that individuals and corporations receive from using their scarce resources to earn that income. This increased incentive to use resources productively creates greater economic growth. As the economy grows, more investments can be made, which in turn create more opportunities for growth, employment, and higher standards of living. Furthermore, economic growth generates higher tax revenues that support the governing institutions. This positive feedback effect is in fact a main motivation for many countries to undertake fundamental tax reforms.

“Since 2010,” says the Obama budget proposal, “federal deficits have shrunk at an historic pace—the most rapid sustained deficit reduction since the period just after World War II. The turn away from austerity in 2014 was ac­companied by another steep drop in the deficit, bringing it to 2.8 percent of GDP—the lowest level since 2007, about one-third the size of the deficit the president inherited, and below the 40-year average.”

Obama took office on Jan. 20, 2009, in the fourth month of fiscal 2009. On Feb. 17, 2009, he signed the American Recovery and Reinvestment Act (ARRA), his economic stimulus bill.

“When ARRA was being considered, the Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation estimated that it would increase budget deficits by $787 billion between fiscal years 2009 and 2019,” the CBO said in a report published last year. “CBO now estimates that the total impact over the 2009–2019 period will amount to about $830 billion. By CBO’s estimate, close to half of that impact occurred in fiscal year 2010, and more than 95 percent of ARRA’s budgetary impact was realized by the end of December 2013.”

On March 11, 2009, Obama signed the Omnibus Appropriations Act of 2009, which the Washington Post described as “a $410 billion spending bill to fund most of the federal government for the remainder of the year.”

In fiscal 2008, the last full fiscal year when George W. Bush was president, the federal deficit was $458.6 billion, according to the historical tables published by the White House OMB. In fiscal 2009, presided over by both Bush and Obama, the deficit was $1.4127 trillion. In 2010, it was $1.2944. In 2011, it was $1.2996 trillion. In 2012, it was $1.0870 trillion. In 2013, it was $679.5 billion. In 2014, it was $484.6 billion. And, in 2015, the OMB is estimating it will be $582.5 billion.

The fiscal 2008 deficit of $458.6 billion was 3.1 percent of GDP, according to the OMB. The OMB estimates that the $582.5 billion deficit it is projecting for this year will be 3.2 percent of GDP.

Since Obama took office, the federal debt has climbed from $10,626,877,048,913.08 to $18,082,294,157,510.20--an increase of $7,455,417,108,597.12.

Thanks for reading my blog hope you have enjoyed reading it.

30th birthday blog

                                               My 30th birthday blog
               
                     By Justin Winn

    The time when my 30th birthday will come the economy will have changed a lot. Like what I mean by that is that the federal debt that we owe to the government. will soon go bankrupt and the trillion dollars that we owe not might be paid for and the government will probable be shut down and that is not a good thing at all. By the on time I'm 30 and I have a wife and a few kids and by the time I have grand kids they won't be able to have there college education to be paid for because they might not able to afford it. The government will always take strange paths to stay in business and to keep our government working and to prevent it from shutting down. But if the trillion we owe to the government is not paid for trouble might come our way. Every child that is born each year and grows to be a high school-er then later has to have there education paid for when they end up going to college, like I said it might not happen because of the costs of financial aide and the money transferred to the college student, is government money that is paid for the college students education. Time will go by and things will change for everyone money, gas, food, taxes, will change problem in about 30 years the same age I will be at in the 30 years that will be coming for me.

But some people will know When a country fails to pay its creditors on time, it is said to go into “default”, the national equivalent of going bankrupt. But sovereign defaults are quite different from business bankruptcies as it is far harder for creditors to repossess the assets of a sovereign entity than to repossess the assets of a company (an unarmed Argentinian naval vessel detained in Ghana for ten weeks in 2012 was an exception). In the first instance, to curry favor in international markets, defaulting countries tend to restructure their debt rather than simply refusing to pay anything at all. But these so-called “haircuts”, where the original value of a bond is reduced, can be much more painful for the holders of government bonds than a simple clip of the scissors. After its $81 billion default in 2001, Argentina offered to pay its creditors a third of what it owed—93% of the debt was eventually swapped for performing securities in 2005 and 2010. But the remainder, which is held by vulture funds and other investors, is still in dispute. These “holdouts” are waiting for $1.3 billion plus interest. And when Greece defaulted in 2012, bondholders were forced to take hits as high as 50%.


 In less severe cases, countries may choose to restructure their debt by requesting more time to pay. This has the effect of reducing the present value of the bond—so it isn't entirely pain-free for investors. Some suggest that this is the right course of action for Ukraine as it struggles to balance its immediate domestic priorities against its obligations to bondholders. Defaults can also be very painful for the offending country, particularly if they are unexpected and disorderly. Domestic savers and investors, anticipating a fall in the value of the local currency, will scramble to withdraw their money from bank accounts and move it out of the country. Critically, there is no international law or court for settling sovereign defaults, which helps explain why they are so varied in length and severity. More international regulation has been proposed—including powers to prevent minority holders from hijacking the process—but such conditions ultimately remain up to the issuing country. The first bond issuance's since the new proposals (by Kazakhstan and Vietnam) include these clauses. Other countries might follow suit, but this doesn't resolve the $900 billion of bonds outstanding that were issued under the old rules.

Thank you for reading this blog I hope you have enjoyed reading this I hope it was worth reading. because I put work into making this blog so thank you.  

Minimum wage blog

                        Minimum wage how much you earn In
                     a daily living

                      By Justin Winn

    Minimum wage everyone will ask me some days how we get paid a certain amount and how much we earn each, week as we work. when I first knew about minimum wage was when I was working a Job on my grandparents, farm, getting paid $10 and hour but what I did not know what and where minimum wage comes from and how most country's will not be paid, a certain amount of money sometimes.  For an example of how Minimum wage works If an employee who Is a liquor server, is paid $10.00 an hour and works only two hours , he or she Is entitled to three hours at the Minimum wage. If you do the math 2* 20 = $20.00 you have earned for working for those long hours at the bar other, places will do the math for you when, you tell them you have been working for 4 or more hours In a day.  this will earn you $40.00 from working for just 4 hours, I thinking learning about this process of how to earn money Is very important because It can help you with certain life skills later on In life and money In budgeting Is important to know before you go out Into the real world.

Speaking of minimum wage that I have been talking about according to the federal minimum wage, provisions they are said to contain the fair labor Standards Act . which means the federal minimum wage is $7.25 per hour which on July 24, 2009 many states have Minimum wage laws stating that this will be the required amount of wage they will, earn In there savings and daily living, but wages are not the same In every state we will not get paid $7.25 an hour, like I said the wage, might change a year later will probable wont know when it will change or not. now that we talked about the minimum wage and how it can effect the government and most states, I will now talk about how the federal government is involved with the minimum wage here is what I have to say about that.

The goods news about the federal government being involved with the the minimum wage is that there, is an increase in the federal minimum wage looks like a real possibility, and how the good news is however depends, on which of the two competing proposals wins out. the differences between the two proposals are not insignificant,
especially when considering the billions of dollars in tax cuts in which the GOP leadership couched its minimum, wage proposal. a comparison of the size and phase in periods, of  the competing minimum wage proposals in relation to the proposed $123 billion GOP tax cut package that, it finds. thank you reading this article I hope you have enjoyed reading I had a lot of fun doing it hope you like to read it again because was it totally worth reading.