WK1 and WK2 HW Assingment - PF

pdf

School

Merrimack College *

*We aren’t endorsed by this school

Course

3305

Subject

Economics

Date

Apr 3, 2024

Type

pdf

Pages

Uploaded by AdmiralSardine4147

WK1 and WK2 HW Assignment by Sep 10 Please briefly answer the following questions and post them here by the due date. also, post your comments to at least one of your classmates' postings as part of your required assignment. I will review these questions in the class in the second week. 1. Visit the website below and look at in tables B-47 to B-49 to provide the % of federal spending of 2019 on the military (US National Defense), health care, Education, Housing, transportation, and social security and also indicate which types of government spending have grown as a % of GDP over time say compared with that of 1960 or earlier. 4 pts National Defense (Military): 15-16% Health Care: 28-29% (this includes programs like Medicare and Medicaid) Education: 2-3% Housing: 6-7% Transportation: 2-3% Social Security: 24-25% Healthcare spending as a percentage of GDP has grown significantly over time. In 1960, healthcare represented a smaller portion of the economy than today. This is due to factors such as the expansion of government healthcare programs like Medicare and Medicaid and rising healthcare costs. Social Security spending has also grown as a percentage of GDP. As the population has aged and more people have become eligible for Social Security benefits, the program's expenditures have increased. While military spending has fluctuated over the years, it has generally decreased as a percentage of GDP compared to its peak during periods like the Cold War. Education spending as a percentage of GDP has seen some fluctuations but has generally increased over time, reflecting investments in education and the growth of federal student aid programs. Housing spending as a percentage of GDP has remained relatively stable over the years, with fluctuations influenced by economic conditions and housing policy changes.

Transportation spending as a percentage of GDP has also remained relatively stable over time, with variations based on infrastructure needs and government priorities. 2. Looking at the Federal Budget in terms of revenue and expenditure per year, please compare the growth of the federal budget deficit and public debt as % of total GDP over time. You may only compare between current budget deficit and public debt (say 2019) and that of for say 1980 and 1960. 4 pts 1960: ● Federal Budget Deficit (as a percentage of GDP): In 1960, the federal budget had a small surplus. Therefore, the deficit was essentially 0% of GDP. ● Public Debt (as a percentage of GDP): The public debt was relatively low in 1960, standing at around 53% of GDP. 1980: ● Federal Budget Deficit (as a percentage of GDP): In 1980, the federal budget deficit had increased significantly. It reached approximately 2.7% of GDP. ● Public Debt (as a percentage of GDP): The public debt as a percentage of GDP also increased during this period. It rose to around 33% of GDP. 2019: ● Federal Budget Deficit (as a percentage of GDP): In 2019, the federal budget deficit was approximately 4.6% of GDP. ● Public Debt (as a percentage of GDP): The public debt as a percentage of GDP had increased substantially by 2019. It was approximately 79% of GDP. These numbers demonstrate a trend of increasing deficits and public debt over the years, particularly from 1960 to 2019. The increasing deficits and debt levels can be influenced by various economic, political, and fiscal factors, including government spending, tax policies, and economic cycles. 3. Given the information you have cited in Q2 above and also from the fact that Each year since winning control of the House of Representatives in the 2010

election, the Republicans have argued that we need to immediately initiate sharp reductions in government spending and entitlement programs and rapidly move towards a balanced budget, (although they have never actually produced a budget proposal in which tax revenues would match government spending plus entitlement transfers). Many Democrats, while arguing that tax rate increases on high income earners need to be part of the any deficit reduction program, have agreed that we need to initiate budget deficit reduction now. Based on this current state of fiscal policy debate, answer the following 2 questions (very brief right to the point, actually in a few sentences). 5 pts 3. a. What is the argument against attempting to balance the Federal Government budget rapidly at the present time via either deep cuts in Federal Government spending or sharp increases in federal income tax rates? 2 pts A Balanced Budget amendment is not advised to address the nation's long-term fiscal problems. The argument against this is that it may cause economic harm and raise many problems for social security and other federal functions. It could increase serious risks of capping weak economies into recession and making recovery from that nearly impossible. Instead of allowing automatic stabilizers like low tax collection and other benefits to cushion an economy, the amendment would force policyholders to reduce spending and increase tax or both. This will weaken the economy and would lead to higher deficits. 3.b. Does this argument imply that budget deficits don’t matter in the long run? If not, why might the impact of large deficits predicted in the long run under current tax and spending programs be different than the impact today? Explain. 2 pts Keeping in mind what is noted above, not all deficit budgets are bad, recent deficits accelerated recovery from the recession, but long-term deficits are harmful. This would increase indebtedness to foreigners which is risky and expensive. Currently, the United States is the second largest net debtor in the world. If foreigners lose confidence, their investment in the country would diminish, bringing down the value of dollars, and raising the prices for imported goods. Therefore, this could increase interest rates and also lead to a further financial crisis. 4. Look at the IRS Tax Stats website and provide the information here about the average income tax rate, tax rates on high income earners, and also show the changes of these rates over time (say from year of 1980). How does this change

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

of tax rates compare with the some similar industrialized countries such as Canada, UK, and Germany? The government finances its spending from the revenue it collects as tax on income, sales, corporate income, and other various sources of income. The largest source of tax revenue is personal income tax 42% of total tax. This is followed by social insurance tax, corporate tax, excise tax, and other taxes. Although, the government taxes as a percentage of GDP have climbed from 11% to 29% in 2010, the US citizens pay the smallest portion of their income as tax to the government compared to the other industrialized nations. The average tax rate has decreased over time for the top 1% and 5% income groups as shown in the figure below. 5. Visit the Website below on local govt expenses of the Commonwealth of massachusetts and answer the question followed: My hometown is Scarborough, Maine. However, I found more information on the Massachusetts website prompted for our use. Therefore, I chose to compare Andover, MA, and Lawrence, MA. Andover is known for being a relatively wealthy town with good school systems and an overall safe environment compared to its surrounding towns. Andover achieves its success by collecting revenue from taxes. In comparison, Lawrence is almost entirely funded by the state of Massachusetts. There is a multitude of reasons why two towns so close together could experience completely different economic states but it is very interesting to take a deeper look into this occurrence.

Related Documents

MIS 570-DQ 2.2-week 3.docx

DL5023 Module 5 Application-Reflection.pdf

Health economics 4-2 Short Paper_ Socioeconomic Barriers to Change.docx

DL5013 Module 5 Application-Reflection.pdf

FINAL EXAM - SDEV.pdf

DL5013 Module 3 Application.pdf

Homework Key Chapter 7.docx

Recommended textbooks for you

Managerial Economics: Applications, Strategies an...

Economics

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:Cengage Learning

Economics Today and Tomorrow, Student Edition

Economics

ISBN:9780078747663

Author:McGraw-Hill

Publisher:Glencoe/McGraw-Hill School Pub Co

Essentials of Economics (MindTap Course List)

Economics

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:Cengage Learning

Principles of Economics (MindTap Course List)

Economics

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:Cengage Learning

Brief Principles of Macroeconomics (MindTap Cours...

Economics

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:Cengage Learning

Principles of Economics, 7th Edition (MindTap Cou...

Economics

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:Cengage Learning

SEE MORE TEXTBOOKS

Recommended textbooks for you

Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning
Economics Today and Tomorrow, Student Edition
Economics
ISBN:9780078747663
Author:McGraw-Hill
Publisher:Glencoe/McGraw-Hill School Pub Co
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Brief Principles of Macroeconomics (MindTap Cours...
Economics
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou...
Economics
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:Cengage Learning