Article Response - explain the subject matter of the...

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Article Response Anthony Cao Bing Chen Article Title: Deficit Would Stay High for Years to Come Article Source and Date: Wall Street Journal, February 14 th , 2011 Economic Topic (and Chapter): Chapter 14 – Budget Deficit What is the article about? Briefly summarize the issues in a non-technical way The article focuses on Obama’s $3.73 trillion budget, and the associated distribution of said money, including defense, nondefense, disaster, medicare, etc. However, many concerns have been raised not only about the distribution of the money, but also the cuts to government expenditure associated with the budget. Lower government spending will result in a loss of many government-funded programs. Moreover, others feel that the cuts to spending in the budget are not drastic enough; hence people must expect the deficit will remain high for many years into the future. What are the economics of the article? How does a recent topic covered in the course
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Unformatted text preview: explain the subject matter of the article? The article focuses on the budget deficit of the US government. Because government spending is being cut, the expected budget surplus should in theory become at very least less-negative than it is currently. Thus, the budget deficit should theoretically decrease with continued reductions in government spending. However, many fear it will be too little of a cut in government spending, and that the budget should be further decreased to accelerate the rate at which the US pays off its enormous deficit. However, it remains to be seen whether that is a truly feasible option at this point in time. Moreover, the proposed changes to taxation policies should further increase the surplus, thereby decreasing the deficit. However, there will certainly be associated repercussions for higher taxation or the elimination of existing tax breaks....
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This note was uploaded on 11/28/2011 for the course ECON 102 taught by Professor Rossana during the Winter '08 term at University of Michigan.

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