Feb. 6th, 2010

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1) Happy Birthday (tomorrow) to ashlupa!
2) Paradice Games did another fun news-y update: http://www.paradicegames.com/?p=66
3) My take on taxes:

Recently in Macroeconomics, I learned in a detailed manner how the Federal Budget Deficit affects the economy. I'm gonna oversimplify this here, but here's the easiest bit on it:

When the government increases taxes, but doesn't increase spending, this helps businesses invest in employees, get facilities and tools to make/do/whatever that they do. Simply, the economy does better, because the government is borrowing less money. In 2002, 20% of discretionary spending (on loans, medicare, social security, defense, etc) went to paying just the interest on the national debt. $600 Billion out of about three trillion dollars was just interest payments. We're doing better now (just 8% of the budget) going to interest, but that's not because the national debt has decreased, but rather because interest rates right now are much lower than they were then.

When the government changes taxes and spending in a balanced amount, the economy continues on, mostly balanced in the effects. This is perhaps best.

When the government lowers taxes and does not lower spending, it helps the economy enter a recession, much like what we have now. The situation I'm referring to was done under Bush, but is continued to some degree by Obama. The government has to make up the gap in what they tax and what they spend by borrowing. By the gov't borrowing huge sums of money, that is money that private companies cannot borrow, and therefore, fewer companies are able to purchase new property, better tools (production technology), and our economy stagnates; wages stop going up, etc.

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