Budget Cuts – Good or Bad?

The federal government, the nation’s largest consumer and investor, is cutting back its spending at rates that haven’t been seen since “military demobilizations following the Vietnam War”. As the government seeks to make up ground on the tremendous debt that has racked up throughout the years, spending and budget cuts have been as noticeable at the federal level as they have been at the state and local level, the New York Times states.  ”Federal, state, and local governments now employ 500,000 less workers than they did on the eve of the recession in 2007″.

While workers from federal, state and local governments are cut to save budget costs, government spending continues to rise for programs such as social security. Furthermore, the constant debate on government spending for healthcare, all things measured, seems to spark the debate on, where should our money be lodged? How much money is being mis-directed within the United States? Read more about this compelling article at:

 
 http://www.nytimes.com/2013/02/27/busine…

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2 Responses to Budget Cuts – Good or Bad?

  1. boswelli says:

    When you talk about the misdirection of funds it instantly reminds me of the leaky bucket model. This is a great example of why, in my estimation, our government really needs to sit down and draft a check list on what they should spend revenue on. Things like military, healthcare, and infrastructure are very important but there are also organizations that are necessities that get over looked.

  2. Brian Cannon says:

    I like how you used this article to illuminate some issues with U.S. fiscal policy. Government spending has been unusually high in the past few years and some believe it has had too much of an impact on economic output. These budget cuts involve a fiscal tightening while expansionary monetary policies will be used, which have already yielded a sluggish decline in the unemployment rate in 2013.
    I came across another article related to these budget cuts and fiscal policy, which can be found here: http://www.nytimes.com/2013/03/01/business/economy/us-economy-barely-grew-in-fourth-quarter-revision-shows.html?_r=0. This brief article gives a positive outlook on the U.S. economy’s future growth despite the budget cuts, highlighting the recently updated 4th quarter 0.1% growth in GDP.
    Both of these articles discuss decreased government spending in the economy, which can be beneficial in terms of the misdirection of funds, as the fed will have less spending money and will have to reevaluate their spending.

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