325_Supplement6

325_Supplement6 - Department of Economics University of...

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Intermediate Macroeconomic Analysis Spring 2011 1 Department of Economics University of Maryland Economics 325 Intermediate Macroeconomic Analysis Supplement 6 Professor Sanjay Chugh Spring 2011 The following article, which appeared in the Wall Street Journal on February 14, 2011, previews the 2012 federal government budget proposal that will be unveiled on February 14. With reductions in some components of government spending and (seemingly) a few increases in tax rates, the proposal envisions the cumulative deficit (which is a summation of flow measures) being reduced by $1.1 trillion compared to existing fiscal for the next decade. The implication of this is that the federal government will have to amass an equivalently smaller quantity of debt (an accumulation, or stock, measure) over the next decade. As it stands, this is substantially smaller than administration officials had targeted several months ago, and is a very modest reduction in deficits and debts given the decade-long time horizon.
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Intermediate Macroeconomic Analysis Spring 2011 2 POLITICS FEBRUARY 13, 2011, 4:36 P.M. ET Obama Budget Plan Would Cut Deficit by $1.1 Trillion Over 10 Years By JONATHAN WEISMAN and NAFTALI BENDAVID WASHINGTON – The White House's budget proposal for 2012 would shave $1.1 trillion from cumulative federal deficits over 10 years, mostly through spending cuts, a move White House officials believe would bring government spending into a healthier balance. The cuts the administration will propose in its budget proposa l Monday wou ld h it a number of federal agencies and programs, but fall short of the spending reductions congressional Republicans will try to push through the House of Representatives this
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This document was uploaded on 11/01/2011 for the course ECON 325 at Maryland.

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325_Supplement6 - Department of Economics University of...

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