Pros And Cons Of Balanced Budget Amendment

The tax cut and increased defense spending increased the federal deficit. Increased spending for welfare programs and unemployment compensation, both of which were induced by the plunge in real GDP in the early 1980s, contributed to the deficit as well. As deficits continued to rise, they began to dominate discussions of fiscal policy. The events of the 1980s do not suggest that either monetarist or new classical ideas should be abandoned, but those events certainly raised doubts about relying solely on these approaches. Reducing the deficit dominated much of fiscal policy discussion during the 1980s and 1990s.

. To ensure price stability is maintained the Reserve Bank adjust the OCR which influences prices in the economy. Price stability, which is when the purchasing power of money stays constant, is a desirable outcome of the government because inflation has several negative impacts on household and firms. Inflation erodes the values of households’ savings and causes those on a fixed income to lose purchasing power, the quantity of goods a set amount of money will buy. For firms, inflation causes cost or production to income since workers’ demand pay rises, as well as making it difficult to firms to plan for future.

National Debt Clock, the current amount of debt the United States is in is over 19 trillion dollars. One of the ways the government plans on paying off some of that debt and by having the money to spend on mandatory and nonmandatory necessities this year is by borrowing money. This will only cause the debt to get bigger and bigger because they will be borrowing more money than what will be paid off. The effects of the government spending money it does not have is that the problems will only get worse and not just for future generations but also for current generations. Even current generations may have to face significant higher taxes on many things such as tax revenue, higher interest rate and even have an impact on the job pool.

He promised that the government would intervene in the economy to provide relief for the great depression, he proposed a ‘new deal’ that would give millions of Americans jobs and create a more stable US economy. “Roosevelt faced the greatest crisis in America since the Civil War.” (Franklin D. Roosevelt Biography). In the beginning of his presidency, he began to make good on his promises, he created many agencies and associations to help get the economy under control and to help lower the unemployment rate. As the economy was stabilizing and the unemployment rates and GDP were beginning to rise back up to normal levels, he fell under criticism for putting too much power in the government’s hands for controlling the economy. He was also accused of putting the nation into debt and not managing the national budget very well.

Furthermore, in Mexico, export, tourism, remittances income is the main source of income, but now these industry has been got hit hard. For Europe, the financial crisis led to the credit crunch. In the run-up to Christmas 2008, result from the employers has no enough money, many employees will not return to work until January 19 (Guardian newspaper, 2008). It can be seen, the British real economy faces severe challenges. Once the financial crisis severe abnormalities, affecting the scope is unprecedented, and even leads to bankruptcy in some countries, such as Iceland (IMF, 2011).

The Origins of Parliamentary Sovereignty Parliament is supreme is creating the law and no authority, not even the courts, are above it. In the case Pepper v Hart [1992] 3 WLR 1032 House of Lords, the issue was whether a teacher at a private school had to pay tax on the perk he received in the form of reduced school fees. The House of Lords departed from Davis v Johnson and took a purposive approach to interpretation holding that Hansard may be referred to and the teacher was not required to pay tax on the perk he received. However, this decision did not affect the supremacy of the parliament. From 1688, the supremacy of the parliament over the Crown was established and can be seen in the Bill of Rights 1688(9).

Supporters believe that raising the minimum wage will positively affect the economy. The individuals that are not supporters of the minimum wage increase feel that an increase, (while it is helping low-income individuals) will make it more difficult for companies and businesses to succeed. Anti- supporters believe that due to the fact that company owners would have to raise wages or prices of their products in order to make profits, this could eventually lead to the business closing. This could then lead to a “trickle-down” effect for the rest of the economy. Anti- supporters believe an increase in the minimum wage will negatively affect the economy.

Budget deficit refers to government spending rather than individuals or businesses spending. In this case, the government’s expenses exceed the amount of revenue received. I think that we are going back to the budget deficit cycle because the budget deficit has kept increasing in the last two years rather than decrease. This is happening due to different reasons. For example, the War on Terror almost doubled the annual military spending, and this definitely affected the budget deficit.

The fact that democracy requires regime change after every four to five years has a been a cause of much economic instability. Different governments coming into power have their own policies with regard to the economy and more often than not will do away with the policies of the previous regime. Such changes have the ability to stunt economic growth. As Doucouliagos & Ulubaşoğlu (2008) observes, democratic governments often indulge in the habit of sunning big structural deficits due to borrowing in order to fulfill election promises while neglecting long term investments. The recent financial crisis in 2008 starkly exposed the fallacies and unsustainability of such debt financed economies.

If it were up to me to change the policy on this increase then I would first hire a team of economists and statisticians to see what the actual effects of the increase are. The thing is that we currently have a lot of conflicting evidence regarding the pro’s/cons of increasing wages. I think in order to make effective policy we need to look at what the root causes are of poverty and what we can do to change it rather than just looking at a short term solution that may or may not help the real issues at hand. Personally I think that increasing the minimum wage makes it very hard for those who make barely above that wage. I have a sister who is a single mother raising a family and makes barely above that wage.