This week my current event was about how a lot of states are expecting to get surpluses (extra money) at the end of their fiscal year. This is the first time this has happened since the economic downturn in 2008. Although many states are very happy and being very public about this great success it is very misleading to the U.S. population. Even though the economy is starting to look up again many states, even the one with surpluses, are in large amounts of debt due to backlogged bills from medicare, pension funds, and delayed road work. Most of the surpluses in fact, are already spoken for. With the economy recovering many officials are looking to restore services, rehire workers, and others are pushing new tax cuts. A lot of governors are concerned with this and urge these officials to hold off on making any changes that could be damaging to this economic progress. Many are advising states to begin trying to identify money that is resulting from a one-time-only activity, such as selling investments which many people did at the end of last year, and money that is not.
Surpluses Help, but Fiscal Woes for States Go On
Do you think that lawmakers should begin to restore services, rehire workers, and create new tax cuts? Why or why not? Also, what do you believe is the best thing for states to do with these surpluses?
The idea of restoring services, rehiring workers and creating new tax cuts sounds really great and like it will bring America back to its feet after the economy hasn't been great the past few years. I don't necessarily think these changes should be put into effect so abruptly though. I side with the governors that are concerned with the new changes as they believe it might further damage the economy in a way that resembles the phrase "one step forward, two steps back". I think our economy is still in rough shape and even with the surpluses, these states should be very precise with where they invest it. To an extent I believe those states that have greater economy and surpluses, they should definitely invest in services, rehiring workers and tax cuts. It would be a smart way to use the surplus money. It just shouldn't be thrown away as usage for something not essential to the economy as a whole just because there is some extra money.
ReplyDeleteI would have to say that lawmakers should hold off. This is the first time surpluses are happening since 2008 and it could be misleading. I think that services should be restored slowly. If everything is done at once then there is a bigger risk of the economy going bad again. Things should be restored gradually and government officials should continue to monitor the economy. If what the government has been doing is improving the economy then I don't see why they should completely change how things are going. Slower changes reduce any risk factors while still making progress and that's the route I think they should go in.
ReplyDeleteI agree with David and Ali that lawmakers should not abruptly implement tax cuts and rehiring workers but they should work on it slowly. Like David said, this reduces risks because if they realize that what they are doing is not good for the economy, they can go down a different path. However, if they put all of the United States' money into restoring services, rehiring workers and creating new jobs, they have to continue with that path even if it is not the right path. I think that tax cuts in general are not something that we should have because the country is in so much debt. I think that the money from the surpluses should go to paying off some of the debt, because it is easier for the countries economy to get back on track if we are not always owing people money. We should not even view the money as extra money because we owe so much money to other people that all extra money should go to paying off the money we owe.
ReplyDeleteI agree with everyone above me, lawmakers must be very careful with how fast they implement these changes. Like David said, this surplus of money could be misleading. Law makers should spend this extra money wisely, and use it for something that would benefit the economy for the long run. If they create a tax cut and send it off right away, they could find out that they made a mistake. If they want to make the economy better, they should use the money to fund job creation, rather than hand out the extra money. If they invest it into job creation, it would benefit the economy for the long run because companies would be able to create more products, people would have more money and therefore the government would too, and the prices of products would drop because of the ammount of people buying their product.
ReplyDeleteI agree that lawmakers should conserve the surplus money the state governments have and use it to slowly repay their debts and restore funding to government services. If they spend all of their surplus money in one year, unexpected cost may come up, such as relief efforts for natural disasters, which they will not be able to pay for if they spend all of the money now. I also agree with Dan that there should not be tax cuts especially if the government is struggling to pay for things.
ReplyDeleteI agree that it's a good idea but shouldn't be taken advantage of. There has not been a surplus in so long, so the government should not go overboard. Giving out new jobs is a good idea, but tax cuts may be an issue since the government can always use money and needs it. I think that some things should be used to our advantage having a surplus, but maybe the surplus should simply stay that way in case we need it in the future.
ReplyDeleteI also think that lawmakers should hold back from intervening in this situation. This is just the first time there has been a surplus of money since 2008 so it is important that it is used correctly. Instead of just spending right away on rehiring and making tax cuts, they should slowly spend. This way they will still have money for the future and money is being put into the economy to help it out. Instant spending would be good or now, but could have no benefit to the future. Similar to Sasha, I don't think that the government should give tax cuts. That money is needed, and we can not guarantee that there will be a surplus in the following years.
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