Monday, February 1, 2010
Obama unveils $3.8 trillion budget
Today President Obama unveiled a $3.8 trillion budget for 2011 that will hopefully control the nation's deficit and boost our fragile economy through continued government spending. The budget is built on the assumption that the nation's unemployment rate will average 9.2% in 2011 and the nation's GDP grows by 3.8% next year. If Congress passes the budget, the deficit decrease from 10.6% to 8.3% and hopefully by 2014 it would drop drastically to 3.9%. Furthermore, good news for us students, $17 billion will be allocated to help students pay for college.
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ReplyDeleteHere is a link to Mankiws blog, his latest post contains a nice graph, showing the contrast between last years propsed G spendings and next. Can you say defecit?
ReplyDeletehttp://gregmankiw.blogspot.com/2010/02/president-obamas-new-budget.html
It's nice to know that Obama is including green technology investment, while still providing for infrastructure investment that is long overdue. While I am not impressed that the unemployment is expected to stay at 9.2%, I am happy with the increased funds for the Pell grant.
ReplyDeleteThe contradiction is that we still need money to maintain supporting our economy through government spending to create jobs. It is good to hear the government want to relieve the deficit by over 2%. But I still think it is a bit soon to unveil now because the unemployment rate is still very high and we need money from budget deficit.
ReplyDeleteBudget deficit is not bad as long as it is balanced in the long run with budget surplus. But it's a little too late for the US economy to take budget deficit into consideration. It is good that some measures are being taken to reduce the national debt by $1.2 trillion over the next 10 years. But the question is, is it too soon? Well, time will course the direction. Overall the decision seems to be quite optimistic.
ReplyDeleteMy main concern about the attempt to create jobs through the $50 billion in tax cuts for small businesses is that what are the guarantees that companies will increase employment? It is certainly one of the most important issues to deal with especially in the short run because of such high unemployment rates and for us students graduating over the next few years, we should hope that employment rates increase. I am slightly hesitant about the prospects of employment even through the boost from government spending.
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