Article review
The Wall Street Journal
The article begins by comparing baseball, corporation and Federal budget. In the comparison, what comes out clear is that score keeping is an important aspect amongst all of them. The article reveals that scorekeeping gives guidance and leads one to the future. In the same way, the article says that the fiscal policy scores should be kept and put under the microscope.
The next paragraph is followed by a review of the debate between Obama and Mitt Romney on tax policies. According to Romney, decrease in tax will decrease the spending but increase on the savings of the country. With the savings increased, the multiplier ill reduce and hence low inflation in the economy of America. However, Obama’s plan on tax is totally different with Romney’s idea. To Obama, decrease on the taxes will not necessarily mean an increase in savings. In this case one can easily agree with Obama’s idea before considering the consequences. With the deficit in the economy that keep on rising will mean that Obama’s policies might not be the best. His ideas have failed to blossom the economy as the rate of inflation in the country keeps on rising as days go on. Romney’s policies, on the other hand, can be compared to those of Clinton whom during his time the economy recorded a surplus. In this case, I would agree with the pattern and plan into which Romney was addressing the fiscal policies.
The article proceeds by comparing the policies but in this case includes the Joint Tax Committee and the Congressional Budget office to decide on how much deficit can be reduced by adopting Obamas plan on a tax increase. Apart from the tax increase, Obama also lobbied for the spending cuts. This tactic that Obama used to outdo his competitor was, however, appealing. With the reduction in spending, there would be an increase in savings. An increase in savings will mean a bigger numerator while calculating the multiplier. The formula of calculating the multiplier includes the use of the Marginal Propensity to Save (MPS). The MPS will increase with a reduction in the spending and hence lower multiplier. On the other hand, Obama might have been right since reduction in spending will ultimately reduce the consumption. A reduced consumption will later reduce the Marginal Propensity to Consumption (MPC).The budget was thus aimed to enjoy the surplus with the Obama’s plans well implemented.
The interview between the CNN and Romney was emphasized in the paragraph that followed. According to Romney, a limit should be put on deduction and exemption especially to people at the high end. With this, he meant that the level of taxing should be on the basis of someone’s wealth. Romney idea looked awkward as it looked as a discriminative strategy. It is, however, a good strategy considering the fact that rich people should pay a lot of tax. People who are unemployed and are unfortunate in life usually feel oppressed with the higher taxes. The disabled in the community are not catered for in the current system. Challenge, however, arises when one wants to lay the level of wealth and how much tax should be paid at which level. Another problem is tax evasion that might arise since the wealthy are always never ready to pay the tax. An increase in tax will mean that the total collections will be high. This will not necessarily bring an impact in the economy if the total government expenditure (G) is also high. Reducing one and increasing one is the solution to the inflammation. The government spending in this case should be the one to reduce. In the article, Obama had a plan to reduce on the government expenditure by reducing the spending.
Down into the article, two simple precepts are enumerated that will help thrive the economy of the US. One of the precepts is that accounting shouldn’t be a barrier on the congress way in their effort to pass the legislation. The Congress has a mandate to pass laws that that should improve the economic growth. The Congress has, however, faced the challenge when accounting has been used as a scapegoat in its failure. The second precept, on the other hand, says that the accounting shouldn’t allow the Congress that the pay cuts and tax cuts that the congress passes cost-free. The percepts in this case are just giving a cautious warning between accounting and congress. The existence between the two should be a peaceful one, and none should interfere with the operations of the other.
The article proceeds by terming three things that make the discussion and the argument between accounting and the Congress. In the first instance, the article becomes simple and says that such arguments are just hard. It is difficult to put a price tag on the sprawling piece of legislation. The article reveals that this act is the time-consuming and incomplete. The article reaches a point of confusion when the author cannot choose between single number and multiple scenarios. The author says that a single number is misleading whereas a multiple scenario is confusing. This confusion leaves the reader confused. However, in the case of the economy of the country; the multiple scenarios should be adopted due to the different natures and conditions of the states.
The second reason is that both JCT and CBO are already adopting the price tag. According to the article the December 2010 bill, for instance, showed an extension in the income and the payroll cuts for two years. This according to the article will boost the gross domestic product of the country. In that year, the sum of all goods and services produced showed a growth of between 0.6 and 1.7. This growth is a positive indicator of the favorable fiscal policies that can help the economy to thrive.
The last view on the economy according to the article was to show the difference between the economists and politicians. According to the article, economists find the economic growth smaller than expected by the politicians. The article finds out that most politicians do not have much idea of what the economic growth is and in most of the time tend to fool the country. This can be ascertained given the fact that some politicians only thinks of politics and not the economy of the country.
This article, therefore, leaves us with food for thought if the country is really heading to the right direction economically. An approach in which the government officials are having towards curbing rising unemployment is questioned. It, however, leaves us with a ray of hope for a better future forecasting an economic growth in case all the planned actions re put into actions.
Work cited
Wall Street Journal October 10, 2012. Putting Fiscal Policies under the Microscope. Accessed on November 12, 2014. <<http://online.wsj.com/articles/SB10000872396390444657804578048433223646530>>
