Perhaps the biggest economic story of the past several months has been the debate over the fiscal cliff and the sequestration. The fiscal cliff refers to the sudden decrease in government spending and increase in tax cuts that could have potentially gone into automatic effect on January 1, 2013. The sequestration refers to a series of automatic spending cuts that went into effect on March 1, 2013; these cuts are split evenly between defense and discretionary programs such as Social Security. The fiscal cliff and the sequestration were initially put into place as solutions to the growing concern over the large U.S. budget deficits; the cuts were deemed to be so severe that politicians would be forced to settle on lesser spending cuts and tax increases to avoid a possible economic crisis.
There has been a great deal of controversy surrounding the inability of Congress to effectively resolve these issues; the fiscal cliff was barely avoided by simply by further delaying the spending cuts and tax increases, while the sequestration was allowed to pass. Both Republicans and Democrats have been criticized for prioritizing their political agendas above the economic well being of the nation. However, I believe the fiscal cliff underlies a much more troubling issue; the government continues to tackle the tough economic issues by simply “kicking the can down the road,” a method that has effectively bankrupted southern Europe. Instead of coming up with real solutions, manufactured crises have been put in place instead.
As an economic superpower, we have the economic wherewithal to sustain such programs for a considerable period of time. However, there will come a point at which the economy will suffer severely from our mounting budget deficits, as well as the rapidly rising federal debt. The concept of living within our means seems to have disappeared; instead, each side of the debate seems to have a sense of entitlement that dangers our future. Critics on the left believe that the less fortunate deserve more federal support, and that it must come at the expense of the wealthy. Critics on the right believe that everyone is absolutely entitled to their income and should not be compelled to give it away. The reality is that there are no absolutes in this debate, and the only way to reach a solution is for both sides to make concessions. Until politicians own up to the harsh realities of our economic situation, we could very well find ourselves in the same situation as Greece.
Alex Gannon
There has been a great deal of controversy surrounding the inability of Congress to effectively resolve these issues; the fiscal cliff was barely avoided by simply by further delaying the spending cuts and tax increases, while the sequestration was allowed to pass. Both Republicans and Democrats have been criticized for prioritizing their political agendas above the economic well being of the nation. However, I believe the fiscal cliff underlies a much more troubling issue; the government continues to tackle the tough economic issues by simply “kicking the can down the road,” a method that has effectively bankrupted southern Europe. Instead of coming up with real solutions, manufactured crises have been put in place instead.
As an economic superpower, we have the economic wherewithal to sustain such programs for a considerable period of time. However, there will come a point at which the economy will suffer severely from our mounting budget deficits, as well as the rapidly rising federal debt. The concept of living within our means seems to have disappeared; instead, each side of the debate seems to have a sense of entitlement that dangers our future. Critics on the left believe that the less fortunate deserve more federal support, and that it must come at the expense of the wealthy. Critics on the right believe that everyone is absolutely entitled to their income and should not be compelled to give it away. The reality is that there are no absolutes in this debate, and the only way to reach a solution is for both sides to make concessions. Until politicians own up to the harsh realities of our economic situation, we could very well find ourselves in the same situation as Greece.
Alex Gannon
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