Saturday, January 23, 2010
Deaf to Deficit Warnings
This author of this article is very against the government sector. He argues that government officials are ignoring the increasing deficit and spending more everyday. In the article it is estimated that the ratio of government debt to GDP will be more than 100% by the end of this decade. The author states that when more government jobs are created, the private sector is damaged equally. He blames the slowing of economic growth on the increasing size of the government sector. Since we discussed the relative size of government debt in class, the situation may not be as dire as the author of this article makes it seem.
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I have to agree with you. The author seems to be more than exaggerating the severity of the current deficit. The US is still the global hegemonic power, even with the recession, and in most cases of hegemony the leading country will inevitably run some type of deficit because of its role in the world economy.
ReplyDeleteI agree with Tiffany about the crisis being exagerated when it comes to budget deficit. The dollar has become considerably weaker in relative to other currencies so which means there is less imports and more exports which consequently reduces the budget deficit.
ReplyDeleteI don't agree with the author of this article either. Government's intervention during the current financial crisis has helped to soften the blow for a lot of people. If the government had not increased its spending to give a boost to the economy, it would have taken much longer for the economy to recover.
ReplyDelete@Diego: I don't think exports and imports have any influence on the government budget, which depends only on the tax revenue and government spending.