...Optional Spending Opting for the Military (revise) In the American culture, value is often dictated through the money one has and the possessions one owns. There is a constant goal to have more. The more things you have, the more you are worth, and the more you can rest safe and assured that you are doing well. Like a bubble, your infinitive collection of things acts as a safety net. Perhaps this mindset contributes to the lack of equivalence in the discretionary spending of the national budget. Money is aimed towards excessive military efforts, which could provide a sense of stability and protection for the American people as the military is given money and remains heavily stocked and prepared for battle. The national budget is a distribution of money from the government to various publicly funded areas such as international affairs, veterans’ benefits, social security, and other areas like Medicare and health or even the government itself. The federal spending is broken down into mandatory spending, discretionary spending, and money from interest on debt. Mandatory spending is not regulated like a typical budget, and is instead derived from...
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...U.S. Military Spending and its impact on the Economy’s GDP Matthew Magana Abstract This paper examines whether increases in military spending have a positive or negative impact on the U.S. Gross Domestic Product (GDP). The paper focuses on the three North American economies: Canada, Mexico and the United States as models to develop a case. It will also illustrate the utilization of multiple economic tools to produce variable outcomes to analyze the full spectrum of economics. It will also discuss the multiple statistical models such as Granger causality and Vector autoregression and the asymmetric results produced. Increased U.S. Military Spending and its impact on the Economy Given the long-accepted, theoretical direct relationship between investment and economic growth, if defense spending has a negative impact on investment, then it would seem reasonable that defense spending would have an adverse impact on economic growth. This was exactly the findings of two studies published in the seventies, zymanski (1973) and Lee (1973). Some studies attribute the negative effect of defense spending on economic growth to reduced investment. Another study argues that defense spending restricts export growth and economic growth because military expenditures compete for the same resources used in the production of exports. Which may also be a understood trade off for military spending vs. export and economic growth. However, other studies were unable to find any stable...
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...The economic issue in the article “Less Bang for a Buck” is that the military excessively spends so much on weapons for the war; it decreases economic sufficiency by investing in excess military ventures. By investing in such ventures it causes several repercussions such as consumption of resources in an immoderate manner. The Government kept spending so much money on the war that they did not think about the long term affects on the economy. The demand for weapons increased while supply decreased which cause the price to increase. Leading to a shift in demand and supply; supply would shift to the left since it decreased. At the rate the military is going, their incentives are more like a punishment to the economy. They had the property rights to the resources which meant that they had the enforceable rights to use the resources of any kind. The resources used to produce the materials were taxed away from the productive population which meant that they would get less of it and the demand would shift to the left. It is basically change in demand versus change in quantity demand. The Government spending was over the top which diverted from making civilian goods. If the Government keeps spending so much money on the war, it may lead to another depression. The economy becomes so fixed upon with its own inefficiency that it loses track on the current state of itself while the value of the dollar continues to drop and fixed institutions slowly get into a bigger...
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...During World War II there was very low unemployment as many men were drafted into the military. Women and those remaining men got jobs in factories manufacturing arms for those fighting. Much of the money they earned was saved as there was little to spend it on during the war period. By 1945 $140 billion was held in private savings. These savings were used after the war to boost consumer spending. After the war the US economy grew as there was little damage to mainland USA and thus no money was spent on reconstructing factories, houses and public infrastructure as had to be done across the UK and mainland Europe. Due to the damage caused to Europe there was a large increase in US exports to Europe as European countries were unable to manufacture goods whilst they rebuilt their factories and infrastructure. The Marshall Plan was a programme for European recovery which gave European countries money to their economies. It is widely thought that the US did this partly for their own benefit. They knew that with this money European countries would buy goods from US factories as they needed to rebuild their factories, this would mean that jobs would be created as there was higher demand for goods. Investment in advancing technology would occur and more tax could be collected from those employed. This all contributed to the increase in the economy. Finally, after World War II the US increased their spending on defence out of fear of communism spreading from Russia. There were large amounts...
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...history. The politicians are talking extensively about the problems on Wall Street versus the problems on Main Street. As we're finding out from the postings, we all hail from different areas in the United States and internationally. Do you think we're all experiencing the same economic challenges or do you think different local economies are experiencing different challenges? Provide some examples to support your answer. In my opinion I think we’re all experiencing the same economic challenges to include different local economies. From a military point of view we too are experience an economic challenge. With the drawdown of forces in Iraq and eventually Afghanistan (to be determined) the military will have to cut down the forces to help reduce Defense spending. And if anyone can remember the Desert Storm/Shield conflict the military was nearly cut in half after it. As for the rest of America it seems as though the days of spending unreservedly are over with. With the recession affecting everyone people are now out of jobs and small businesses are out of work and trying desperately to keep themselves a float. This can especially be seen in the housing market where you have big name cities at an all time high foreclosure rate. In the end I believed the economy became what it is today due to our frugal lifestyle. I admit I was the same way but in the end it caught us all by surprise and now we have to figure out how to fix it and hopefully regain some or all the jobs lost by...
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...This policy drives the budget by controlling government spending as well as the collection of revenues in order to directly influence the country's economy. The government implements this policy through various programs in order to produce expected results on the nation’s income, stabilize economic growth, and maintain high levels of employment. The fundamental purpose of the fiscal policy is to minimize fluctuations in the economy by reducing inflation and recession. In order to achieve its objectives, the Fiscal Policy relies mainly on two tools: government spending and taxation (Weil, 2008). The Federal Government spends money on a large volume of staff and services for society. For example, make available military equipment for its armed forces, support the police, provide healthcare and education, assist with welfare benefits, implement public transport infrastructures, and invest on the public sector. The main source of government’s revenue is through tax collection. Changing tax rates increases government revenues so that it can provide public goods which can not be provided by the market alone. Taxes apply to both personal and businesses income. Moreover, the government applies taxes to specific sets of goods, known as sales taxes. Taxation has been one of the most debatable and polemic topics in economic policy (Minarik, 2008). Fiscal policy seems appealing in that changes made by government at the spending and taxation composition level, may directly affect variables...
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...Obama and Congress have identified several areas in which the U.S. can reduce spending. The Federal Government is projected to spend $925.2 billion on their Department of Defense budget. Those funds include but are not limited to costs of military combat equipment, installations, salaries, retirement, and healthcare. Among those, the Active Duty, Retirees, and Military families’ healthcare is currently proposed to be cut saving the Federal Government approximately $1.8 billion by 2013. TRICARE, the health care program for active duty, retirees, and military families, was enacted May 1997. TRICARE replaced Civilian Health and Medical Program of the Uniformed Services “CHAMPUS” and was intended to increase quality of care for eligible beneficiaries. TRICARE has several different plans that make up the overall TRICARE health care program. TRICARE Prime the plan for active duty, their dependents and retired personnel. TRICARE Prime is a HMO style plan with no enrollment fee. Beneficiaries have a primary care provider, typically at a military installation’s medical facility; they see and attain referrals from for all specialty care. TRICARE Reserve Select is available to all military reservists. TRICARE Reserve Select has a monthly premium and allows beneficiaries to see civilian healthcare providers that are payable under TRICARE regulations. In May 2001 TIRCARE for life was added for retired military personnel and their families who prior to TFL lost their TRICARE benefits once...
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...act (Budget Control Act). This act was passed in August of 2011. The budget cuts are supposed to equal over a trillion dollars total! This is supposed to continue from the year of 2013 to the year 2021 divided perfectly in the 9 year time period. They are also evenly split between defense spending and discretionary spending, which is spending on things like medicaid and social security. Just for the year of 2013, the cuts total cost came to a total of one hundred and nine billion dollars. (Suzy, 2012). The Sequester was actually designed in 2011 to force The Joint Select Comittee on The Super-committee to agree on a reduction package. The sequester will dramatically save a lot of money each year, saving 940 billion dollars and interest by 200 billion dollars. Nine tenths of the savings actually come from discretionary appropriations. Majority of the madatory programs, this including (social security, medicaid, food stamps, and verterans' benefits) are not included for the sequestation. Of course there are more that will be exempt, but those are the fast majority of them. Not only will the defense spending be cut by almost ten percent, while the majority of the non-exempt, non-defense spending by nearly seven percent, medicare by two percent, and other madatories by seven percent. (Understanding the Sequester. 2010, January 1). With the expiration of Bush's tax cuts and the payroll cut, this would have greatly resulted to a huge contraction, almost positively throwing the United...
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...Fiscal Policy 1. Meaning of Fiscal policy Fiscal policy refers to the way government utilizes taxation and spending with the aim of influencing the overall economy. Usually, the government use fiscal policy to ensure strong and sustainable economic growth and reduce poverty (Horton & El-Ganainy, 2009). The function and objectives of fiscal policy have increasingly gained popularity in the current financial crisis as most governments have stepped in to promote financial systems, jump-start growth, and solve the implications of the crisis on vulnerable groups. The main goals of fiscal policy include * Maintain low rate of inflation * Stimulate economic growth especially during economic recession * Typically, fiscal policy works to stabilize economic growth, bust economic cycle and avoid a boom 1. Responsibility for fiscal policy The executive (the president) and the Congress are responsible for fiscal policy 2. Difference between fiscal policy and monetary policy Fiscal policy is concerned with changes in taxation and changes in federal government purchases while monetary tool is involve shifts in supply of money and in the interest rates. Both the monetary and fiscal instruments are aimed to achieve favorable macroeconomic policy goals. When policymakers aim to affect the economy, they manipulate the fiscal policy and the monetary policy. The central of bank any country indirectly influences activity by changing the quantity of money under circulation...
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...service costs money; therefore a nation’s economy - and the spending of that money - works to shape the sociological core of that nation. But how should that money be spent? One can argue that education spending is important to a nation’s well-being. During the 19th century US President James Garfield commented that “next in importance to freedom and justice is popular education, without which neither freedom nor justice can be permanently maintained” (as cited in McPherson, 1912, p.192). One way in which a nation’s value for the importance of education can be quantified is by examining the public spending on education as a total percentage of government spending. In this paper, I will review education spending as a social indicator for three distinct, geographically diverse, and very financially disparate nations: Oman, Georgia, and the Republic of Congo. The social indicator that is education spending greatly affects other social factors; I argue that it is a foundation piece of a great country, and that without national support for education, overall quality of life is diminished. What defines public spending on education? The World Bank clearly describes it as “public expenditure on education includes government spending on educational institutions (both public and private), education administration, and transfers/subsidies for private entities (students/households and other privates entities).”1 Education spending is not only governmental monies, it also includes items like...
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...used to describe the practice of using mandatory spending cuts in the federal budget. It was first the Budget Control Act of 2011 this was the bill that would have set a limit on what needs to be done and cut to make the economy better, but they fell to get this bill into play because there was a divide in the congress wants. The sequester came about because congress was required to vote on December 23, 2011 about cutting spending, but did not do so. Republicans and Democrats needed to agree to balanced spending reduction for the bill to be passed. If failed, which they did, the enforcement mechanism will began spending cuts starting in 2013 on March 1. It would split 50/50 between domestic and defense spending. The law protects some Social Security and Medicare benefits. Democrats wanted a mix of spending cuts and tax increases. House Democrats suggested trading the $85 billion in 2013 sequester cuts with a combination of tax increases, and the Senate Democrats also introduced the American Family Economic Protection Act which would have replaced the 2013 sequester with $110 billion in spending cuts and tax increases and both spread plans would spread out over the progression of a decade rather than hitting so hard in a year. Republicans insist that only spending cuts need to be made. House Republicans suggested the Spending Reduction Act of 2012 Budget would have replaced the 2013 defense sequester with a variety of spending cuts, including cuts to food stamps, the Affordable...
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...property, sales, etc. (Brue, 2010) When thinking about taxes, if the government had 100% tax this would have a negative effect on the amount of taxes the government would get; and if you had to pay 100% tax, you would not work because you would be working for no income. If this was to occur then people would probably spend more time growing their foods and using the batter system to get things you need to live. But if people had to pay no taxes, then people would think that things were good being able to keep a 100% of the money they have earned, but then the government would have no income to stay running. This would be bad for the economy because there would be no one to protect our country from other countries because we would have no military due to no one...
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...met under the rules. Inflation Rate is a term that 5 6 is used that refers to the rise in prices in a given product or service over a given time period . Interest rate is a monthly or yearly charge a lender puts on a loan to a borrower. The rate is in most cases a percentage of the total amount of the loan. In the purchasing of groceries, a household needs to add this to the overall budget of running the house. It is a need of the household and must 7 be budget for , or a family might not have the money needed for the purchase. The company that sells the groceries counts on the consumer to buy from his/her store and has a goal 8 of the number of product he/she must sale to remain open. The government also needs to buy groceries for the military and other area in which they serve food. The government buys much differently than a family as the government buy in large quintiles and makes deals direct with vendors or farmers. A Family does go to a store and relays on the store to have the needs of the family. If a store fails to do so, then the family must...
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...Reserve will try to contain inflation without triggering a recession. According to an advance estimate made by the commerce department economic activity slowed as a result of builders putting up fewer homes and consumers cutting on spending. Economists explain that slowing growth and rising prices will continue to complicate Fed’s task of deciding what level of interest rates is high enough to contain inflation. However, it’s not so high to slay out economic growth. Between April and June inflation grew at a rate of 2.5% whereas the core personal consumption index rose at an annualized rate of 2.9% in the second quarter. More so the level of worker’s wages and benefits rose at 3.6%. Once the Friday report was released investors took up the vision that Fed would be more likely give the economy a break by holding the interests steadily at 5.25%. This report confirmed the predictions of the economists that cooling house market as well as the consumer spending will take a bite out of economic growth. However, some economists had the hopes that business investment as well as improving the foreign trade would offset declines in spending and construction. This only came partially. A different report indicated that people may not be inclined to cut spending sharply. Another economist noted that the gap that existed between the wealthiest third and the poorest third consumers reached its widest pint in 20 years. According to a research conducted by the commercial department the rate...
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...administration and created their own centralized administration and the high income taxes the previous rulers had and replaced it with less demanding and lighter taxes of the Koran. The Mahdist state was structured in states that had military governments that would maintain control. Khalifa was ambitious It seemed like he knew what he was doing. Khalifa was very ambitious that he made an oath to serve the Mahdi until victory was achieved. All was going to plan and Khalifa knew what the Mahdist people wanted but the process of creating his dream was too much of a task for Khalifa. Khalifa seemed he wasn’t ready to lead the Mahdist state. Since the Mahdist state had collapsed only after 13 years, the collapse shows he was not ready for ruling a state. Many factors led up to the decline of the Mahdist Empire. Khalifa had created his own administration and reduce the heavy taxes to the Koran taxes that the Mahdist state was before the Turko-Egyptians came in. With taxes put down that meant there would be less income for Khalifa to use on his administration. He didn’t have enough money to satisfy the needs of the local military governments that he created; he didn’t have enough money to be able to spend for the Mahdist state and for his own private spending. With Khalifa not really good at economics and finance he failed at creating a centralised economy that would function well. That is a major problem because for a leader to be successful in ruling a country and developing a country...
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