Steven Firmin

Macroeconomics
November 27, 2015
Today, in America, what happens when you turn on the news? If you

had three guesses, you would probably have guessed either the Presidential

Primaries, ISIS terrorism, or how our economy is on its way to hell in a

handbasket per say. Well, what is a huge factor of our economy? Well, using

the GDP formula, Government spending is one of the things that can be used

to grow our economy. But how much do they spend? Well, they never agree

on anything anyways so Wait, they passed a budget? Without a

government shut down? I dont know what to say. Let us discuss and

analyze this budget then shall we, and maybe discuss my idea for a budget

plan to at least alleviate the stress on the economy.

Some of the main highlights of Budget 2016-2017, include about one

hundred and twelve billion (yes nine zeros), in new funding to prevent

sequestration, with funding given evenly to the defense and nondefense

programs. In short this is the equivalent of just paying the interest on the

money we owe off. So wait does that mean that they really havent done

anything? you may be asking yourself (Well probably not since you are a

teacher), but the purpose of this is that this will be a placeholder while a

better plan is being devised. So, to answer your question, yes they have

been arguing over what to do with no real result occurring with the time

given. Have you seen their debates? They have to give comedians

something to make fun of; else they would have to come up with jokes

themselves. Also, as a side note the budget will run out on December 11th.
Steven Firmin
Macroeconomics
November 27, 2015
This means that there will be a government shutdown. This sounds oddly

familiar. But either way, it seems oddly specific to have. One of the major

problems with the budget (if there werent enough already) is the fact that

the government still overspends.

While they political parties debate and create chaos to up their political

rankings, let me discuss a plan so controversial, so insane, so perfect, that

999 out of 1000 politicians will vote it down, but when the election time

comes, 750 will claimed they were the one who approved it. This plan is

what I like to call ESPER or the Essential Systematic Plan for Economic

Recovery. The big words grab your attention? Well, unlike what is happening

in congress, this is a much more short term plan, given as an alternative until

both sides can make an agreement on a budget. Part one of ESPER; Cut all

government expenditures by one percent. This is an across the board one

percent spending cut, all groups, whether they are defense or nondefense

will be cut evenly. Part Two of ESPER; Raise the max tax rate by one percent,

and remove one percent from the excluded tax bracket. The whole point of

this is to give the government more money to spend on, since we really need

to start paying off more than just the interest. I know what you are thinking,

but while one percent cut and 2 percent gained seems like not enough, that

is because the percent is cumulative every year. The second year will have a

two percent decrease, two percent higher on the maximum tax rate, and two

percent minimum tax rated individuals. The Final Part of ESPER, is the added
Steven Firmin
Macroeconomics
November 27, 2015
part that Congress members will lose five percent of their paycheck and it

will be used to help pay off the debt until it is at a much more controllable

level.

While it is a method that could work relatively well in theorey, there

are 3 major problems with it. One of them being we cant afford to cut

spending on a certain thing. Okay, each political party will say either

defense or nondefense and scream we cant cut that. Also with the same

thing that comes down to it, they will also scream, we cant raise the tax

rate, or we cant lower the minimum rate. This is the first major problem,

Cant Syndrome. Well, in America we call it political party systems, but

either way, no side can compromise with them losing anything. The Second

reason why ESPER would not be approved is because it will lower the GDP.

The main reason is that the cut in spending, the more taxes, means that the

G part of the GDP formula will go down, the amount people buy, since they

make less, will go down, and while this pays off debt, it prevents us from

growing. The Final reason that this plan would never be approved, is the fact

that Congress doesnt want to limit their paychecks. While I agree that if a

company was going down the Board of Directors should try and cover the

costs, but not Congress. They will probably try and raise their paychecks

again since they can vote to get a higher paycheck.

In conclusion, while the plan of Congress is set in stone. To answer the

questions, as stated before, yes they came up with a plan; no the

Steven Firmin
Macroeconomics
November 27, 2015
government will still probably shut down; and no, we are not out of any debt,

and we are actually probably in more debt. While this makes the future

seem bleak and miserable, just remember it could be a lot worse, as it will be

tomorrow, and the next day until we kick Congress and get them to fixing the

economy.