- 70,000 children would get kicked out of early childhood intervention programs that help poorer children catch up to middle-class peers, heading into kindergarten.
- 1,000 fewer criminals would be prosecuted due to furloughed federal prosecutors.
- 4 million fewer "Meals on Wheels" would be delivered to the elderly.
- 1,000 fewer research grants would be awarded, cutting research and laboratories for some 12,000 scientists and students.
The House Republicans are staying traditional and want to replace the defense cuts with more non-defense cuts, something the Democratic party rejects. The Democrats want to replace the cuts with a more 'tax-centered' strategy. The proposed sequester budget cuts could slow the growth of the economy. With the slowing of the economy will come job losses and the curtailing of many programs. Will the proposed budget cuts be beneficial? Should the government raise taxes? Time will tell.
http://money.cnn.com/2013/02/08/news/economy/white-house-budget-cuts/index.html?iid=Lead
I think the article is a great one. The deficit is a huge problem that the government has had significant trouble dealing with over the past couple years. 1.2 Trillion dollars is an enormous hole to be in and there are many different ideas of how to reduce this deficit. It will in fact be very interesting to see how the government handles this situation.
ReplyDeleteThis article highlights what a difficult balancing-act policymakers must perform in order to get the economy back on track. On one hand, cutting programs and government spending along with an increase in taxes will help the government get closer to a balanced budget. However, with the resulting increase in unemployment, consumption is likely to struggle- especially with the tax hike.
ReplyDeleteI agree, this is a very interesting article. Any change that the government attempts to make for the economy, at this point, will be scary/risky, especially one this drastic and taking place in such a small interval of time. Another, more broad complication that is painfully obvious, is the possible drop in GDP because of one of its factors (government spending) being decreased. However, the decrease in government spending should open more doors for investment and perhaps less crowding out. Compensation from the other factors in GDP has the power to keep it up, but it all depends on the way the market operates and any external factors that may present themselves. Coming from a more optimistic view than the article, maybe the risk is worth it to take to improve the government's debt. It is quite apparent that with the deficit, there are going to be trade-offs that must occur. Let's just hope the benefit is larger than the opportunity cost this time.
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