What is the 'Fiscal Cliff?'
BAckground article questions
Vocab Preview
We ALL will complete this lesson Part I in class or at home on Monday.
Then we will meet in the MITS Lab on Tuesday. Half of you will break down President Obama's speech, and half of you will break down Speaker Boehner's speech (linked below) and we will deliberate the question, "Should the Federal Government concentrate on spending or revenue in creating compromise legislation to avert the fiscal cliff."
TUESDAY's Congress Test will be a take-home exam -- Happy Thanksgiving!
Speaker Boehner on the Budget and Tax CutsQuestions for President Obama's Speech on the Economy and Deficits
Questions for Speaker Boehner's Speech on Budget and Tax Cuts
“Budget Deficit” vs. “National Debt”
Suppose you want to spend more
money this month than your income. This situation is called a "budget
deficit". So you borrow (i.e.; use your credit card). The amount you
borrowed (and now owe) is called your debt. You have to pay interest on your
debt. If next month you don't have enough money to cover your spending (another
deficit), you must borrow some more, and you'll still have to pay the interest
on the loan. If you have a deficit every month, you keep borrowing and your
debt grows. Soon the interest payment on your loan is bigger than any other
item in your budget. Eventually, all you can do is pay the interest payment,
and you don't have any money left over for anything else. This situation is
known as bankruptcy. Below, imagery to help us think about the issue of a $16.2 trillion federal debt.
What does ONE trillion $$$ look like?
7 comments:
Seeing as much money there in with a trillion dollares, how are we that much in debt and where does all this money disapear too?
In a nutshell,
fiscal cliff = the government spending money they dont have, no more tax breaks (which will ultimatly ruin small businesses) and increasing spending cuts. Obama care also comes into play at the begining of 2013 which basically screws over all of the hard working upper/middle class people. Can you tell I'm Republican?
I thought this article from Cagle Post was interesting.
http://www.cagle.com/2012/11/fear-not-the-fiscal-cliff/
The article mentions that Congress could at anytime prevent the fiscal cliff by meeting. The author blames the Republicans for the possibility even existing because of the tax cuts from the Bush Presidency.
Seeing the amazing amount of money we are in debt I just wonder how will it even be possible to get out of the massive debt we have. Although I don't think raising the taxes on people pay back our debts will work considering contractionary policy should be used in a time of recession.
I think that, as Boehner recently said in in a CNN article, massive changees have to be made to avoid the fiscal cliff, which include tax raises and as much budget re-apportionment and modification as possible (particularly with military spending).
I feel like honestly, at this point, it's realistically going to take several decades (maybe even centuries) to pay back our debt, and even then it would still require enormous changes to our fiscal system. To be frank, I think it's gotten to the point that politicians are just kind of like "Whatever, what's a few billion dollars more when we already are >16 billion in debt?". I hear stuff from my parents and on TV and websites all the time, saying things like "you're going to have $(some huge amount) of debt on your head as an individual in your generation", etc etc. Honestly, it's to the point where I just kind of brush that off. The debt has become so massive that I think people kind of have given up hope....This may not be the right attitude, but it's kind of true.
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