...6months. This is why will be taking all necessary action to avoid more cuts. First I want to thank everyone for their hard work and dedication to the company. Our staff and all ends are the front line to this company and work to ensure that the company operates effectively on a daily bases. It is very critical that every employee is up to date on these budget issues, this written memo will provide the following information and strategic plans: A). Workloads will increase due to the loss of employees, this means taking extra work responsibilities and duties. B). Performance and monitoring C). Build Operational Capacity plan D). Plans to address the budget deficit We will address the above challenges by following the performance leadership approach: Responsibilities and Duties Plan Leadership in each department will communicate with each employee within and provide a breakdown of their increase duties and how the will carry them out. Keep all communication with remaining employees at hand it will ease down anxiety and rebuild productivity with the company. Some employees feel more confident with shared information, they have a better understanding of the situation, and they feel more...
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...Apply NPM Principles to Reform Initiatives tackles about kinds of leadership, how to manage people well and that someday leadership will turn to “no one is in charge”. Leadership is a process that occurs throughout an organization, it is not just for the President, Governor, Head Officials or any person that is in high position but it is for every citizen. Shift leadership is also necessary for any country to survive. Leadership needs to be conceptualized,it is inevitable associated with important human and public policies, individually and collectively.Top – Down leadership is outdated, new approach to leadership is advisable because today, citizens are more cooperative, wants to participate in decisions that involves them and their family, they want to be heard not said. People became more educated about their rights as citizens and how to put it in use. New Public Management (NPM)is an approach being glorified by government officials of Germany, it is tested and used in most countries, and it results to success and positive feedback's. NPM is said to be a respective government need. If it is implemented properly, it can be an effective approach to reform public sector. The only main concern is that, “Is Philippines ready? Do Philippines have the ability to embrace it?“ Since Philippines is one of the most corrupt countries with problematic election, bloated bureaucracy, fiscal deficit, budget deficit, deterioration investment climate and economic stagnation. All of...
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...Natioinal Debt 1. What is the debt? How much is it? Examples The national debt has grown significantly in recent years due to rising annual deficits. A deficit occurs in any year the government spends more money than it takes in. Borrowing to make up the difference is added to the national debt -- technically referred to as the gross federal debt. The gross debt has two components: 1) Debt held by the public -- money the government borrows on the open market from domestic or foreign investors; and 2) Intra-governmental debt -- money the government owes itself, as in the Social Security trust fund. $15.7 trillion If you spent $1 million a day since Jesus was born, you would have not spent $1 trillion by now...but ~$700 billion- same amount the banks got during bailout. 1 trillion is 10ft high larger than a football field 2. Decrease politican pay. Examples The current salary (2011-2012) for rank-and-file members of the House and Senate is $174,000 per year. •Members are free to turn down pay increase and some choose to do so. Leaders of the House and Senate are paid a higher salary than rank-and-file members. Senate Leadership Majority Party Leader - $193,400 Minority Party Leader - $193,400 House Leadership Speaker of the House - $223,500 Majority Leader - $193,400 Minority Leader - $193,400 A cost-of-living-adjustment (COLA) increase takes effect annually unless Congress votes to not accept it. The most recent salary increase, to $400,000/year...
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...are not necessarily shared by any of the institutions with which they are affiliated. We thank Al Davis, Peter Diamond, Edward Gramlich, Peter Orszag, Gene Sperling, and Lawrence Summers for comments on an earlier draft. Elmendorf was formerly Deputy Assistant Secretary of the Treasury in the Office of Economic Policy, and prior to that Senior Economist at the Council of Economic Advisers; Liebman was formerly Special Assistant to the President for Economic Policy at the National Economic Council; and Wilcox was formerly Assistant Secretary of the Treasury for Economic Policy. Table of Contents Page 1. Introduction 2. Budget Outcomes and Projections Improved Budget Picture Sources of Improvement 3. Budget Deficit Reduction: 1990 through 1997 OBRA90 OBRA93 What Did Deficit Reduction Ultimately Accomplish? The Republican-Controlled Congress BBA97 4. Entitlement Reform and Saving Social Security First Entitlement Commissions Social Security Saving Social Security First 5. Social Security Reform Options Using Projected Budget Surpluses as Part of Social Security Reform Investments in Private Financial Assets Potential Compromise Reform Proposals The 1999 State of the Union Social Security Proposal 6. Budget Surpluses: 1998 through 2000 The 1999 State of the Union Budget Framework Balancing the Budget Excluding Social Security Fiscal Policy in 2000 A National Asset 7. Conclusion References Tables Figures 1 3 9 24 40 63 78 80 84...
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...China’s budgetary system Year III Finance and Banking Balea Calin Dobrovolschi Natalia 2012 Content Introduction………………………………………………………………..pg 3 Traditional Budget Accounting…………………………………...……… pg 3 1.Taxonomy of Chinese Accounting……..…………….......................... pg 3 1.1 The Domain of Budget Accounting……….…………...………... .pg 3 1.2 Chinese units……………………………………………………... pg 4 2. Public Financial Management Process……………………..……….. pg 4 Conventional Budget Accounting …………………………………………pg 5 1. Overall and Unit Budgets…………………….…………………….. pg 5 2. Characteristics of the Chinese Budget Accounting System ….….…..pg 6 2.1 Accounting as a Budget Tool…………………….…………….. pg 6 2.2 Characteristics…………….…………………….……………… pg 7 The 1994 Budget Law………………………………..…………………… pg 8 1. Scope…….……………………………………………………….....pg 8 2. Institutional structure…………………………………………….....pg 8 3. Budget policy……………………………………………………….pg 9 3.1 General Policy…………………………………………………. pg 9 3.2 Separate Revenue System……………………………………....pg 9 3.3 Dual Budgeting System………………………………………...pg 10 3.4 Functional Classification of the Budget………………………...pg 10 3.5 Increased Budgetary transparency………………………………pg 11 3.6 Increased Effectiveness in resource utilization………………….pg 11 Further development………………………………………………………...
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...Budget Deficits, National Saving, and Interest Rates William G. Gale and Peter R. Orszag September 2004 Brookings Institution and Tax Policy Center. This paper was prepared for the Brookings Panel on Economic Activity, September 9-10, 2004. We thank Emil Apostolov, Matt Hall, Brennan Kelly, and Melody Keung for outstanding research assistance; Alan Auerbach, William Brainard, Robert Cumby, Bill Dickens, Doug Elmendorf, Eric Engen, Laurence Kotlikoff, Thomas Laubach, Maria Perozek, George Perry, Frank Russek, Matthew Shapiro, and David Wilcox for helpful discussions; and Eric Engen, Jane Gravelle, and Thomas Laubach for sharing data. ABSTRACT This paper provides new evidence that sustained budget deficits reduce national saving and raise interest rates by economically and statistically significant quantities. Using a series of econometric specifications that nest Ricardian and non-Ricardian models, we obtain evidence of strong non-Ricardian behavior in aggregate consumption. Consistent with several recent studies, we find that projected future deficits affect longterm interest rates, but current deficits do not. Our estimates suggest that each percent-ofGDP in current deficits reduces national saving by 0.5 to 0.8 percent of GDP. Each percent-of-GDP in projected future unified deficits raises forward long-term interest rates by 25 to 35 basis points, and each percent-of-GDP in projected future primary deficits raises interest rates by 40 to 70 basis points...
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...and each has strengths and weaknesses embedded in it. In order to assess whether multiple perspectives on politics can be fruitfully applied simultaneously, we describe and analyze a case of a hospital administration engaged in budgeting games and illusion making. The data for the case were collected using naturalistic inquiry and multiple methods including structured and unstructured interviews, review of documents, observation of meetings and casual interaction facilitated by frequent visits over a ten-month period. The case revolves around the hospital administrators' attempts to deal with what they termed a "disastrous deficit" and the most serious financial situation in the hospital's history. Strategies for dealing with the funding agency and board of directors included the management of meaning and communications about the term "deficit." The three perspectives on organizational politics highlight different dynamics in the case. The interpretive perspective on politics assumes that parties exert influence by constructing the meaning of what others experience. Focusing on a deeper structure of power, the elements of politics which become highlighted are the use of...
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...Week five Fiscal Policy Paper * Depending on the time, the economy can have many financial stages. There are times when the economy is facing a budget deficit, which means the tax revenues in the government are lower than the government expenditures. The economy can also experience a surplus and high debt, which can also drain an economy. The state of our government can affect people from taxpayers, to the elderly who are collecting social security, to children needing medical and governmental benefits for their well-being. The government debt situation can be either an advantage to the population by lowering taxes, or a disadvantage by making taxes higher. * To know how taxpayers, future Social Security and Medicare users, and unemployed individuals are affected by the U S.’s deficit, surplus, and debt. It is important to understand the definitions of deficit, surplus and debt. Surplus occurs when there is more supply than demand, as in extra resources. Deficits occur when a government's expenditures exceed the revenue that it generates. Debt is an amount owed to another person or government in economics. * Taxpayers can benefit from a budget surplus. A surplus can create a reduction in the tax rate which leads to a higher consumer’s savings rate. The less taxes that consumers have to pay allows spending or savings in other areas. An increase in national savings (reduction in tax rate) also creates additional money that can be available for banks to...
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...nondefense spending, increased defense spending and balanced budget. His policies brought success in stimulating the economy. He was able to improve the lives of the people and certain concerns during those times such as recession, unemployment and inflation. In 1985, while efforts have been made by President Reagan to uplift the economy, the US government was still beset by unbalanced budget due to deficits. Thus in his second term, he focused more in addressing this problem. However, the economic policies he implemented appeared to have created a setback in the country’s budget. In addition to the existing deficits prior to his term, deficits continued to increase. Objectives This paper aims to give an analysis on the cause and effect of the deficit problem Reagan faced in his second term and an analysis of the strategies he implemented in solving it. This paper also offers alternative strategies that would allow Reagan to reduce the deficits and balanced the budget. Analysis The Causes of the Budget Deficits This paper discusses three major cause of the budget deficit during Reagan’s term – tax cut, military spending and recession. The administration’s policy for tax cut was implemented to break the postwar trends to help the people and make an economic turnaround. Tax is the major source of...
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... Jingze Yuan The government budget deficit is the difference between government revenue (mostly taxes) and government spending; the current account deficit is the difference between exports and imports (there are some adjustments for items such as funds sent abroad). Both deficits occur when someone is spending more than they earn; during the last 25 years the US government has tended to spend more than it collects in taxes and US residents have tended to spend more on imports than they export. A nation’s current account deficit reflects excess domestic spending. Equivalently, a current account deficit equals the excess of domestic investment over domestic savings. Regarding the Twin Deficit approach, Bernheim argues that if world capital markets are integrated and Ricardian equivalence does not hold, an increase in the budget deficit will almost certainly contribute to the current account deficit. A regression of the current account on the budget deficit (both scaled with GDP), while controlling for business cycle effects using growth and lagged growth gives a coefficient of 0.3 on the budget deficit in the case of the U.S. and similar figures for Canada, U.K. and Germany. Furthermore, tax smoothing implies a one-to-one relationship between the current account and the fiscal deficit. The underlying mechanism is that a constant tax rate induces the budget deficit to move one-to-one with public spending and therefore with the current account...
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...spends 40% more than the revenue it collects per year. This continues to be a highly debated topic within our legislative and executive branches of government. One reason the Federal Government’s major entitlement programs are difficult to control is the way they are designed. A second is that current budgeting process ignores long-term impacts of short-term expansions. A third is that these programs are not subject to regular review, like the other annual discretionary programs are. The means that Congress rarely evaluates the costs and effectiveness of entitlements except when it is proposing to expand them. Costs of healthcare continuing to rise, funding numerous war campaigns, and a broken tax system are all contributing to the widening deficit in the budget. It is quite clear that sacrifices must be made. The question remains: where do we begin? Background: Alexander Hamilton, the first Treasury Secretary, set up federal debt to pay off debt incurred by the Revolutionary War. Until the Great Depression in 1933, federal debt was used only to fund wars. In 1933, President Roosevelt began spending and raised the federal debt to around 40% of the GDP. From that point on, the federal debt has ranged from 122% of the GPD following WWII, to 50% of the GDP during the Cold War to the current value of 99.4% as presidential policies and goals changed (see Figure 1). During the end of the Clinton administration and through parts of the Bush administration the United States retained a...
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...Efforts to Reduce the Budget Deficit Melissa Hillard ECO203: Principles of Macroeconomics (BAJ1347A) Instructor: Kathryn Armstrong December 9, 2013 Efforts to Reduce the Budget Deficit Between the years of 1980 and 1993, budget deficits amounts increased and the national debt tripled. The public debt in this country has grown by more than $500 billion each year, in July 2012 nominal GDP was $15.8 billion. The ratio of debt reached a 10 year low in 1981 (32.8%) and went to 73% in 1993. By 2012 it was almost 100%. The actions taken by Congress since 1985 and the current debates between the Whitehouse and Congress, including what measures are necessary to address spending and revenue, will be reviewed. In 1981 President Reagan’s advisors proposed a 30% reduction in personal income taxes and an even bigger cut in corporate profit taxes. The actual result was a 25% cut in personal income taxes. At the time there was a conflict as to why the taxes were cut. There were several groups that had different opinions as to why President Reagan cut the taxes and what his expected results were. “Some supply-side economists argued that the increased incentives to work, save, and invest would actually result in increased tax revenues” (Amacher & Pate, 2012). Though there were some effects on tax revenue, there were not enough to offset the original tax cut. A second group believed that the purpose of the tax cut was to limit the revenue source that the government was...
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...“America is on a dangerous budget path. Current spending and debt are dangerously high, and future spending and debt are on track to rise even higher in large part due to the increasing entitlement spending” (Boccia, 2013). As recent as February of 2014, congress has decided to yet again raise the debt ceiling for America, this time capping the limit at $17.2 trillion dollars. This marks the fifth effective increase in the debt ceiling since August 1, 2011, when it was $14.3 trillion (Sahadi, 2014). If America continues to raise this limit, how is the debt crisis that our nation is currently experiencing going to affect our businesses; and more importantly, us as individuals in future years? The issues that need to be addressed to see where the root of this problem starts, and where the solution can be found starts with looking at the events other countries have or are currently facing, and how they have come up with strategies to solve their debt crisis. From there we need to focus on the economic trends that we are currently in, and the negative and positive effects that they are having. The effects that will be discussed are how creditors view America, how it affects businesses through prolonged drag and economic growth, and how it will affect the individual with inflation and increase in taxes. As this paper addresses these issues, it will reveal the scary truth of the tolls that will be put on America if they continue with their dangerous budget path. “The warning bells...
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...Reduction of Federal Budget Deficit Author Institution United States federal government has run deficit budgets in 36 out of the last 40 years. A deficit budget occurs when government spending exceeds the total taxes collected. The government of the day has to borrow either internally or externally to fund the debt. Budget deficits are not necessarily bad because they accelerate economic growth (Alesina & Ardagna, 2010). However, debt increases beyond certain levels impact the economy negatively. For instance, high government debt implies that the savings generated in the economy will be used to repay the debt instead of being invested in development activities. High interest costs created by huge debts discourage work and savings are reduced. US annual debt currently stands at 7 percent of gross domestic product compared to the general average of 3 percent of GDP. This paper suggests different policy options that should be undertaken to reduce the budget deficit by 2.5 trillion US dollars over the next 10 years. Some of the policies relate to reduce spending while others relate to increase taxes. By applying the following measures, the federal government will be able to reduce spending by 940 billion dollars, increase revenue by 1561 billion dollars and eliminate 2.501 trillion dollars from the federal budget deficit. By increasing taxes on alcoholic beverages by 40, cents on a fifth of liquor and 50 cents on a six-pack of beer or a bottle of wine, the federal government...
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...Twin Deficit For the past 2 years, India has been fighting slow growth, high inflation and the twin deficits – fiscal deficit and current account deficit. The current account deficit reached the peak of 5.3% of GDP in Q1 FY13 which is much beyond the comfort zone of 3%. The fiscal deficit has also proved difficult to control, leading to a large part of borrowing going into servicing the debt rather than towards capital intensive activities. Off late the threat of being relegated to the status of junk bonds has made the government to swing into action and try and take steps to curb the deficits. It is the result of these measures that the fiscal deficit is not expected to go much beyond the government target of 5.3% of GDP. As a part of its efforts, government has also come up with the target of reducing the fiscal deficit to 3% of GDP by 2016-17. In order to rein in on the fiscal deficit, under the direction of Finance Minister, government managed to cut expenditures to the tune of Rs.80000 crores. Besides this, unlike previous years government has managed to keep its stake selling program on track, which is expected to result in the revenue receipts of about Rs.30000 crores. However, the government has also been cutting corners and using financial jugglery to cuts the deficit. Transferring the subsidy payment bills onto the next year and one time receipts from stake sale in PSUs are not effective and long term solution. Apart from this, losses like those of State Electricity...
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