Federal Budget Case Study

1. There are 6 largest budgets items in the U.S government, they are Medicare/Medicaid ($96 billions), Social Security ($88 billions), Defense/War ($58 billions), Income Security ($31 billions), Net Interest on debt ($24 billions), Federal Pensions ($25 billions). Each one has its own importance though the U.S government should cut back spending on few of the budget items. They conducted survey and got federal pension and defense/war should be cut back. In my point of view they should cut back in federal pension because the defense is mandatory for U.S citizens the government should protect citizens that is there responsibility, without defense we can’t protect from enemies foreign and domestic.

2. Missouri has better management than Illinois because of its lowest debt of $47 billion which is less than Illinois i.e. $164 billion. The lowest debt is due to low Population ($6 million), Gdp ($29 billion), unemployed (172044), Debt to Gdp ratio (16.1%), Revenue ($42 billion) and Debt per citizen ($7863) in Missouri State. In my point of view lowest debt/gdp ratio results better management and based on their finance between these two states, Missouri is

lesser than Illinois. If the Gdp ratio is high, it is difficult to pay debt and there will be trouble in high interest rates. The economy produced by this state is large number goods and services that probably profit that are high enough to pay back debts. So, by this analysis Missouri state has better management.

3. Yes, there is a reason for americans to be concerned over their current debt ,there should be cutoff in their pensions, medicare, social security and recently president Obama has cleared to overcome this debt as “ Economic shutdown”( Seletan, 2013).

4. Trade deficit is just not a problem for the us economy, instead it’s a progressive sign for the economic growth in us. And if we can observe that the US economy from the past three decades we can observe that the raise in economic growth and increasing trade deficit go hand in hand. And as the economic growth, considering poor and needy the US should set the national goal of cutting poverty in half over the next 10 years and a strategy to cut poverty into half it should have some guided principles like provide decent work, provide opportunity for all, ensure economic security, help people build wealth.
According to me these following four steps reduce poverty level. Our minimum wage EITC(Earned income tax credit), child credit and child care recommendations and from 2015-2016 budget address government is spending $930 million in social programs as investment in Northwest Territories to encourage healthy life style and free from poverty.

5.

GDP is high for U.S compare to China, India, Germany, Japan because of its high levels of research, capital investments and moderate unemployment rate it crossed 17T in gdp but due to the federal debt, the economy is going to decrease in future. CBO estimates that federal debt held by public survey is currently 74% of gdp at the end of this year and 79% in next 10 years. But still in my point of view for the next 10 years US will be in leading position because china cannot be global growth and its gdp (10T), Germany is the world’s fourth-largest economic power but depends on exports and its gdp(3.9T). Japan has greater technology but it is economically less and its gdp(4.2T) and India’s gdp is 2T. So I predict, for the next 10 years US will be in top position due to high gdp, low debt compare to other

countries.
The gdp is high for Europe & central Asia followed by East Asia & Pacific and Northern America. As of from my analysis East Asia & Pacific will lead because of its oil refineries and improves gdp ratio.

6. There are many country I would like to develop the manufacturing of batteries with nano technology, but I will prefer China because of its low transportation cost. Japan is well known for its technology but cost of transportation is and in china we can develop new products that will increase productivity and employement. Now, china is growing in its market so I would preferably look for that country where we can develop our product. China is my choice due to transportation.