I was twelve years old when the 2008 stock market crashed. I was unaware of what was happening around me in the world. The crash didn’t seem to affect my family. If it did affect my family, my parents did a great job of hiding it from me. It did affect tons of other people in the United States. How were we supposed to recover from this collapse as a nation? There seemed to be two options going forward. On one hand, people favored increased government spending, they believed this would soften the economic hardships brought on by the collapse and ultimately would lead to a resurgence of the economy at a quicker pace. On the other hand, others believed that government spending should be decreased in order to create a stronger economy and hasten …show more content…
A lot of people would struggle. Increased spending may create a multiplier effect. Increased spending creates more jobs for the unemployed and that leads to them having more money to spend and that money being spent on other things that benefit the economy. Pros of government spending include; investments in the private sector, increase in aggregate demand, economic output, and foreign trade increase. Cons of increased government spending; higher government spending leads to higher taxes in future, will cause reduced spending due to anticipation, government can’t spend money quickly and wisely, if they increase spending quickly, they may end buying things of little value to the public, if the government tries to be careful and deliberate in planning its expenditures, it may fail to increase aggregate demand in a timely fashion, households spend their disposable income on things they value, firms spend their investment dollars on projects they expect to be profitable. To me, the pros outweigh the cons. In my opinion, I would want to depend on the government to bail us out of a recession rather than wait for the economy to get back to normal. It has worked in the past. So why not do it again. If you look at it as a business, to be successful you have to spend money to make money. If the government puts money into the economy, the economy will profit off that …show more content…
You always have to plan for something that might go wrong in the future. In 2008, I believe we weren’t ready. The government did the best they could, and it ultimately worked out for us. The 2008 recession prepared us for future and the way the budget process works in the future. The budget process has evolved over time. It is always changing. The constitution doesn’t specify how the federal budget process should work. Because of that, it has evolved and led to agencies like the Office of Management and Budget, the Government Accountability Office, and the Congressional Budget Office. They all play a critical role in creating the budget. The budget process will keep evolving over time. New agencies will be created. New laws will be
At first, the effects of the crash were felt by people who had invested a great deal of money in stocks which was about four million people out of a population of one hundred and twenty million people. Some investors lost their life savings and everything they had. Then, people who had never even owned one share of stock were affected. Banks loaned large sums of money out to high risk businesses and consumers in order to profit from the interest on the loans. These high-risk businesses and consumers were unable to repay these loans when the stock market crashed. People also ran to the bank to take out their money, which were called bank runs, for fear that the bank would run out of money. Banks failed due to unpaid loans and bank runs. In just a few years after the crash, more tha...
Calvin Coolidge even said, "In other periods of depression, it has always been possible to see some things which were solid and upon which you could base hope, but as I look about, I now see nothing to give ground to hope—nothing of man." People were scared and did not know what to do to address the looming economic crash. As a result of the Depression’s seriousness and severity, it took unconventional methods to fix the economy and get it going again. Franklin D. Roosevelt and his administration had to think outside the box to fix the economy. The administration changed the role of the government in the lives of the people, the economy, and the world.
We’ve all the heard saying desperate times call for desperate measures. During this time the American people were in need of a miracle. The world suffered a severe economic depression, known as the Great Depression. The Great Depression (1929-1939) preceded a decade before World War II (1939-1945). Although the timing varied for cities across the United States, it was considered the longest, most widespread and deepest depression of the 20th Century. The Great Depression started with the collapsing of the U.S. stock market prices. The stock markets crashed on 10/29/1929, marking it the day known as “Black Tuesday.”
For government budgeting to be effective, the process that guides it must be an evolving one. As the government gets bigger, it will most likely destabilize the existing method. Therefore, it must change to keep pace with the demands and growth of the country. The process must be capable of handling the complexity of our nation and its multifaceted needs so it will always need revisions and restructuring to face these new challenges. Its ultimate goal must be to reinforce the government and strengthen the country.
Title I is funding for elementary and secondary schools in the legislation that was passed by Congress on April 9, 1965 (Phyllis McClure, Center of American Progress). Furthermore, this title is to ensure that disadvantaged children in middle to low class neighborhoods have a fair and equal opportunity to receive a high-quality education like other individuals in other districts. Moreover, Title 1 was also to help students reach at least a minimum score of proficiency on state standardized tests (U.S Department of Education). Also, the California Supreme Court in 1971 created the Pupil system to equalize the funding throughout the school districts throughout the state. (Margaret Weston, PPIC Publication). Title 1 funds are still used today in public schools.
The President in office at the start of the recession was Herbert Hoover. As the beginning signs of the recession started to show through, Hoover was very sure that the hardships would subside. Hoover told the nation that they had, “…passed the worst,” and as it was written by Stephen Feinstein, Hoover believed that, “The economy would sort itself out.” He was proved to be very wrong. Once President Hoover realized that the economy would only get worse, he began coming up with ideas to repair the nation. Hoover was afraid that the government would butcher his ideas, therefore, he presented the nation with less helpful solutions. The President’s solutions in...
... Tax revenues would then increase and d the government would invest more. This would lead to higher quality education and the economy expanding.
Deficit spending happens when a government grows its debt, meaning that its spending is greater than its income. Deficit Spending, 2008 Deficit spending is a fiscal policy, that when used appropriately can do some amazing things, like pull the United States up from its bootstraps effectively ending The Great Depression. President Hoover increased government spending by 50% and used the money to fund public works and infrastructure projects from 1928 to 1932. (Deficit Spending, 2008)
Throughout the years the U.S has had more budget deficits than it has had surpluses. This is due to the excess in spending and not enough revenues to pay for it. Many have debated over the U.S budget deficit problem. However to fix the problem one has to research the past to figure out how the U.S budget deficit got to where it is now. Hopefully by figuring out this, one could project what the U.S budget deficit will look like in years to come.
Should the government decrease military spending or should it increase military spending? This is a question that many Americans wrestle with, and politically speaking, is a point of great contention since to many, military might evokes a sense of security. However, when considering this question from a foreign policy standpoint, does current military spending really match the current level of threats faced by the United States, or are too many dollars being allocated for an unnecessary level of military strength? There are certainly cons in making the decision to drastically lower military spending, but they are minimal when compared to the positive ramifications such a decision would have. This paper aims to explore these pros and cons
Budgetary planning may differ between organizations. Single-period budgets and rolling budgets have methodologies that provide advantages and disadvantages that may make one budget time frame better than another. A single-period may require less time in planning during a fiscal year, but is less accurate than a rolling budget that is continuously planned on a repetitive basis. In either case, budgets are planned in advance in order for a company to operate profitably, and less so to have "actual results equal budgeted results." (p. 496)
The Stock Market Crash of 1929 was a major event in history of The United States affecting thousands of people’s lives. Also changing the way we manage stocks today in the U.S. People back then were forced to sell properties, and personal belongings to stay alive during this time. The people fought through it and made the proper sacrifices to stay alive through the ordeal. With the banks shutting down and losing their savings they still made it through.
In time of economic crisis the government has a choice to cut spending or increase spending for public goods and services. “In 2009, Congress passed the American Recovery and Rein- vestment Act, which authorized $787 billion in spending to promote job growth and bolster economic activity”(Stratmann/Okolski 3). John Maynard Keynes, an economist of 20th century, suggest that the government should run a deficit if it will create jobs and increase capital gain. This theory support the current stimulus package that has been introduce during President Obama’s term. Although the flaw with this concept is that it makes the assumption the government has done studies and understands which areas needs the funding the most and knows where it will be beneficial, realistically that is not true. “Federal spending is less likely to stimulate growth when it cannot accurately target the projects where it will be most productive” (Stratmann/Okolski 2). This can be seen because political figures will spend money where it directly supports their needs as well. For instance, the political figure would rather spend money to things that will yield a p...
An increase in government spending or a reduction in net taxes is always aimed at increasing aggregate output (Y). The main aim is to stimulate the economy but this may lead to many problem such as inflations, budget deficit because of needed debt to finance the deficit. Before finding out which is the better options for stimulation of any economy we need to first be clear with the concept of multiplier.
government budget surplus. The receipts for the year amounted to $330 billion while expenditures for the year were $323 billion. This gave a budget surplus of $6 billion. <>Overview<> Economic and spending changes generate a surplus. A budget surplus is an indicator of a healthy economy.