Current Event Discussion

Current Event Discussion: Fiscal Rifts Course: Instructor: Date: The US budget deficit has been increasing over time, but faced with the prospects of government shut down politicians argue their cases on the need to cut spending. Politicians and policy makers agree that the American economy would suffer in the long- term if there is no action to reverse the trend of increased budget deficit. However, legislators across the political divide have divergent views on the way of spending cuts. On one hand, Republicans would want an extension of Bush tax cuts, and a decrease in social welfare financing by the federal government. On the other hand, President Obama and some Democrat want an increase in taxes and debt limits, without any reduction in welfare programs like Medicaid. After Obama approved a health care Bill, there were fears that the bill would likely lead to increased financial burden on employers. To Obama and his supporters, this bill would increase insurance coverage to people who would otherwise not be covered in most health insurance policies. As such, this would highly benefit the citizens, but this would be at the expense of the state. Legislators opposed to this move state that government should reduce spending on the health care to avert a financial crisis in government departments by September 30th 2013 (Harwood, 2013). At the heart, of this debate is on the role of the government in the economy and to what extent welfare services should be a priority for the federal government. Another contentious issue is the level of budget cuts known as sequester (Harwood, 2013). Legislators across the ideological divide are not in agreement on the role of budget cuts to the economy as a whole. Budget cuts for the business community may increase investor confidence, and consumer confidence leading to more consumers spending. Supporters of continued sequester budget cuts are typically fiscally conservative, but they are also reports that the cuts may adversely affect the Pentagon’s ability to perform effectively (Harwood, 2013). On the contrary, o...