Bush Tax Cuts: To Expire or To Extend?

In case you didn’t know, the national debt of the U.S. is now projected to reach $13 trillion in the year 2018 which is about 65% of the gross domestic product that America produces. Way back in 2008, it was estimated that the national debt will only reach about $5.1 trillion by the year 2018. There is a huge difference of about $8 trillion which clearly emphasizes the struggle faced by the nation today compared to years back. A ballooning budget deficit along with an underperforming economy might still increase to these figures to unimaginable proportions.

The reason for such increase in national debt is the fact the America is known for having relatively high budget deficits. According to the Budget Office, the deficit for fiscal year 2010 is $1.3 trillion which is already 10% of America’s GDP. Because of this, fears of a larger deficit have hampered government spending especially on social services. The recent economic recession was blamed for the lower tax revenues collected by the government.

The public and business sector can’t stand to see the government accumulating more debt. Very high interest rates are the result of the loss in confidence by the financial sector to the government. The consumers are the ones who are directly affected by the poor decisions undertaken by politicians. In order to bring back investor and consumer trust and confidence, the government should put better transparency unto its programs and work to restore the healthy growth of the economy.

Another major issue today is with regards to the extension of former President Bush’s tax cuts. This bill granted tax discounts to large companies in order to boost their profit and create more jobs for the public sector. According to the budget office, the extension of the tax cuts will cost the government another $2.3 trillion in total debt. The assumption that tax cuts will trigger economic growth by increasing consumer spending is in fact a fluke. People prefer to save money for future use rather than spend most of it.

Pres. Obama’s version calls on the extension of tax cuts but only for people who earn not more than $250,000 per year. The good side is that it will only give tax discounts to people who really need it. In a country where over 50% of the total wealth resides only with the top 10% of the income list, several measures should be undertaken to ensure that proper distribution of wealth is guaranteed. While it is still best to permanently let the tax cuts expire in order to generate revenue for other better stimulus programs, letting some tax cuts to continue will still be effective as long as provisions will be established to automatically remove them when unemployment levels normalize.

Regarding the Afghan War and the Proposed Expiration of Tax Cuts

Did you know that the ever popular Afghanistan war has already existed for 9 years now? The war began on October 7, 2001 with the primary goal of disrupting the movements of terrorist organizations and eliminating them in the process. On June 7, 2010, the war was officially declared the longest war in the history of the United States of America. And now, the war is still on a standstill with the number of US serviceman growing day by day. How many more US troops will lose their lives in foreign soil fighting for a war that is really full of uncertainties?

A popular and much debated issue of this controversial war is about the deployment of a newer batch of troops to bolster the already high number of troops stationed there. The Congress and the White House has continuously argued and debated about the exact number of troops to be deployed on the battlefield. Sending another set of troops would mean more cost to the taxpayers and also an increase in the possibility of more American casualties.

Amazingly, a Republican and renowned critic of President Obama, Rand Paul came in defense of the president when criticized about the decision of sending in more troops to the war. He said that Congress should focus more on other important functions and leave the decisions regarding the war to the White House. We should face the fact that the US is slowly but surely losing the war effort. Sending in a ton of fresh troops without gaining any significant result is just a huge waste of taxpayer’s money. There are still more internal problems that the US government should be solving rather than spend more on a war that is just going out of its way.

He also emphasized that Democrats believe that the government is key in creating jobs and saving the economy. In contrary to the belief of democrats, Republicans believe that the private sector, entrepreneurs or the business institutions are the ones who create jobs and would greatly help in economic recovery. With the impending expiration of tax cuts to be imposed by the government, he believes that this would only spell disaster. Tax cuts to be expired would mean larger taxes to business institutions where they try to cut cost by removing a fraction of their workforce. This translates into unemployment or underemployment which is very bad for the economy.

From a Republican’s point of view, businesses are very much important in salvaging what is left of the economy. Giving enough benefits and incentives to institutions would ensure their capacity to acquire manpower and provide jobs to Americans. In this time of crisis, the business sector is critical and should act as the primary mover towards economic recovery.

To Cut Government Spending is Never a Solution

We all hear about the struggling economy of the United States of America and their ever rising budget deficit. More and more American citizens are facing the incredible situation of unemployment or going near the poverty line. One solution that was proposed to solve these issues was to cut government spending on basic yet critical services. The services include giving employee benefits, unemployment benefits and so forth.

But how are we so certain that cutting government funding for services will lead us to the promise land? If there’s one thing that a government should and must do, it is to empower its citizens and provide the best possible service it can give. If the government will cut down on these services, then more people will suffer. The unemployed sector will get poorer as benefits will be reduced to dust. Instead of mitigating the problem, it is only making it worst. How good of a decision is that?

If we were to analyze the real cause of this problem, it may have come from a bigger conspiracy involving rich and powerful personalities. The US government provided huge tax cuts to rich companies. These alone caused instability on the economy wherein rich people get richer while less-privileged people suffer the burden of more taxes.

It isn’t a problem of the government spending too much for its citizens but it is a problem of spending for something that is not worth it. The government is spending billions of dollars into military equipment and technology. Add the fact that the current wars that the US is involved with are also eating up much of the budget the government has. They whole-heartedly spend billions of dollars for war while they cut or reduce their services for the country’s citizens? Where is the essence of the government being the empowering force unto its citizens?

The government should face the reality that most Americans are unsatisfied and unhappy of the way the government is running the country. There is really a big problem on the priorities that were set by congress regarding budget spending. Tax cuts on rich people are really not so ideal at all. Projects should be more focused on human development and livelihood instead of buying a thousand missiles which is not even needed at all. I hope that they do realize that cutting government services will not only pull down the economy but also destroy nation. Let us all be aware of this crisis and stand up to make our voices be heard.