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Stimulating the Economy By: Jackie Borzillo, Kelsey Silvius and Laurel Young
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Intro/ History: 20s 1920s automobiles became the country's largest industry, led the way to other inventions. stock market crash of 1929 30s Great depression 40s Government responsibility to maintain high employment, growth, and stable prices WWII (war time economy) 50s Korean War the government enacted few major policies economy was fairly good
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Intro/ History: 60s LBJ building of the Great Society larger societal shifts, such as the evolving role of women in the economy and changing consumption patterns 70s Stagflation lingered throughout the 1970s: two recessions and the creation of price controls, floating exchange rates, and expanding global trade. Productivity slowed had terrible effects on the U.S. economy. 80s changing market structure and its effects on deregulation 90s Job insecurity led to economic insecurity
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Recent (late-2008 financial crisis) Often called the Global Recession, Global Financial Crisis or the Credit Crunch Is considered by many economists to be the worst financial crisis since the Great Depression of the 1930s.
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Present day National level, the discussion moves to government budgeting and growth, employment, and inflation. America’s smallest companies add up to 50 percent of U.S. GDP. Nearly 60 percent of the private sector workforce is employed by the small- business sector The recession technically ended as of April 5 th 2010
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Evidence/ Statistics 2011 Ranking Economy GDP (US dollars) United States 14,582,400 Inflation rate for the U.S. 3.9 % Unemployment rate in U.S (As of Oct/20/11) 9.0 Dropped to 8.5 as of Jan 6 th 2012 Stock Market loses 2010 at 7608.92, down 13% Our national debt is now 15 trillion Interest is around 3.7 trillion Federal Budget deficit is around 1.3 trillion Federal spending is around 3.6 trillion
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Recent Developments 2011 Super Committee fails to agree on deficit- reduction plan November 21,2011 Republicans and Democrats were unable to compromise on the tax and spending issues that have divided Congress Major topic for the presidential election 2 month payroll tax holiday passed by senate Also unemployment extension
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Cato Institute Conservative Interest Group Against Stimulus plan More government spending will not help the government Policymakers should make reforms to remove obstacles that prevent work, savings and investments
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Cato Institute Arguments against the Stimulus Plan The Federal Government Is Broke Spending Is the Problem State Infrastructure is Well Funded Rising Federal Debt Is Fiscal Child Abuse A Bailout Would Flout State Fiscal Traditions A Bailout Would Delay State Reforms State Situations Vary Bailouts Beget More Bailouts Opportunity for Restructuring
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“There is no disagreement that we need action by our government, a recovery plan that will help to jumpstart the economy.” — PRESIDENT-ELECT BARACK OBAMA, JANUARY 9, 2009
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Center on Budget and Policy Priorities Liberal interest group Unemployment insurance Helps people who have just lost their job Receive part of their wage Up to 26 weeks Promotes ways to eliminate poverty Organizes programs for low income houses
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Center on Budget and Policy Priorities Works on issues related to and including Medicaid and the Children’s Health Insurance Program Food stamps Temporary Assistance for Needy Families Supplemental Security Income WIC and child nutrition Low-income housing programs Low-income tax credits
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Republican Position Deregulate Complete free market economy Want government spending cuts across the board Fiscal accountability Policymakers should be accountable for spending Typically want a balanced budget Cannot spend more than they take in
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Democratic Position The Stimulus Plan Tax cuts More jobs created Unemployment benefits Education Health Care More regulation in financial markets Want to use government spending to create more jobs Want to reassure confidence in the economy to promote growth
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Libertarian Position Everyone is looking for a handout Government only has the right to ensure the protection of property rights, judge disputes, and provide a legal framework Government does not have the right to control wealth or trade
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Video GOP Plans to Stimulate the Economy http://www.cbsnews.com/video/watch/?id=73 70028n http://www.cbsnews.com/video/watch/?id=73 70028n http://www.cbsnews.com/video/watch/?id=73 70028n
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Democrats – Obama’s Jobs Plan Progressive income tax Pro: more tax revenue Con: not fair to wealthy; many loopholes to get out of paying full tax amount Tax credit for first-time home buyers Pro: improves housing market Con: expensive in short run
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Obama’s Jobs Plan (cont’d) Money to improve infrastructure Pro: repairs old structures; creates jobs Con: lengthens projects to maintain jobs; expensive Personal tax cuts Pro: increases spending Con: much of what we buy comes from outside U.S. → positive effects weakened
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Republicans Reduce federal regulations until unemployment drops Pro: eliminates regulations that are stifling job creation Con: too few regulations could cause problems like corruption Eliminate Environmental Protection Agency Pro: extremely expensive to fund all of the EPA projects (i.e. greener factories) Con: environment facing many problems, like global warming, that we need to fix before its too late
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Republicans – Cain’s 9-9-9 Plan 9% personal income tax, 9% sales tax and 9% corporate income tax Pro: simpler than current tax system; flat tax for individuals & businesses; shifts taxation from production to consumption Con: adds national retail sales tax on top of income tax; creates possibility of adding a Value Added Tax, which is unknowingly built into the price of everything
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ResponseAll votersRepublicansDemocratsIndependents Approve39%63%14%43% Disapprove51%30%73%49% Not sure10%7%14%7% Republican Presidential candidate Herman Cain is proposing a change in the federal tax code to replace current personal income and business tax rates with a flat 9% rate on both, and to also have a 9% national sales tax. Do you approve or disapprove of this plan Cain calls "9-9-9"? Zogby ©
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Bibliography Bivins, Larry. "Lawmakers See Pros, Cons in President Barack Obama's Debt-reduction Plan." Postcrescent.com. Gannett, 20 Sept. 2011. Web. 2 Jan. 2012.. Center on Budget and Policy Priorities. Center on Budget and Policy Priorities, 2012. Web. 03 Jan. 2012.. Clancy, Dean. "Herman Cain's "999 Plan": The Good, the Bad, and the Ugly." FreedomWorks | Lower Taxes, Less Government, More Freedom. FreedomWorks, 6 Oct. 2011. Web. 02 Jan. 2012.. DNC Services Corporation. Democrats - Change That Matters. Democratic National Committee, 2011. Web. 03 Jan. 2012.. Lincoln, Blanche, and Dan Danner. "Open Letter to President Obama." Small Businesses for Sensible Regulations. National Federations of Independent Business, 1 Nov. 2011. Web. 03 Jan. 2012..
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Bibliography (cont’d) Mascaro, Lisa. "Super Committee Fails to Agree on Deficit-reduction Plan." Featured Articles From The Los Angeles Times. 21 Nov. 2011. Web. 03 Jan. 2012.. Newport, Frank. "Americans Favor Obama Jobs Plan by 45% to 32%." Gallup.Com. Gallup, Inc, 14 Sept. 2011. Web. 02 Jan. 2012.. RNC: Republican National Committee | RNC: Republican National Committee | GOP. Republican National Committee, 2011. Web. 03 Jan. 2012.. Roth, Zachary. "Cain Tweaks 9-9-9 Plan — for Poor, It’s 9-0-9." Yahoo! News. Yahoo! Inc, 21 Oct. 2011. Web. 02 Jan. 2012.. Schiermeyer, Corry. "IBOPE Zogby Poll: 51% Disapprove of Cain's 9- 9-9 Tax Plan & 48% Believe It Would Raise Their Taxes." IBOPE | Zogby International. Zogby International, 27 Oct. 2011. Web. 02 Jan. 2012..
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Bibliography (cont’d) Taylor, Timothy. "History of the U.S. Economy in the 20th Century." The Great Courses. The Teaching Company, LLC. Web. 03 Jan. 2012.. The Cato Institute. Cato Institute, 03 Jan. 2012. Web. 03 Jan. 2012.. U.S. Congress Joint Economic Committee. United States Congress, 2010. Web. 03 Jan. 2012.. U.S. National Debt Clock : Real Time. Usdebtclock.org, 2012. Web. 03 Jan. 2012.. World Development Indicators Database. "Gross Domestic Product 2010." World Bank, 1 July 2011. Web. 3 Jan. 2012. <http://siteresources.worldbank.org/DATASTATISTICS/Resources/ GDP.pdf Wyss, David. "Obama's Stimulus Plan: Hits and Misses." Businessweek. 18 Feb. 2009. Web. 02 Jan. 2012.. "Year-End Review." Business News & Financial News - The Wall Street Journal - Wsj.com. Dow Jones & Company, Inc., 2011. Web. 03 Jan. 2012..
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