US Deficit (2)
The US today faces a deficit that would need a lot of effort and endurance to overcome it.
There have been many reasons as to why this huge deficit has been caused over years.
Many congressional analysts have attributed it to the tax cuts and the costs of war.
Of course, the decrease in the growth of the economy as observed in the last year or so is actually caused by the continued weakness of the economy and the stock market, and if we were to believe what our economists say, these issues would continue to exist for some time to come.
While on one hand a part of the administration argue that there is little threat to the economy due to this budget deficit, on the other hand, we have the other part of the administration as well as the general public clearly voicing out opinion that this deficit is going to lead us to more troublesome times.
So, who’s to be held responsible, you might ask.
The president?
I am sure most wouldn’t agree, as it makes more sense to ascribe the responsibility to the Congress.
Need an example to support his claim?
Well, here’s one:
One of the major factors that directly impacts the cost of whatever we buy at the super market is the cost of diesel.
That’s because for you to get what you need from the supermarket, it has to first be transported and stacked there.
Transportation needs diesel, and the higher the cost of diesel, the higher would be the cost of whatever you buy.
When Congress insisted on very low sulfur content to be present in the diesel that’s supplied by oil companies, obviously it meant that more stringent processes had to put in place to filter the sulfur.
This, in turn, leads to higher costs of processing and production and that leads to higher cost of diesel – that’s how the cost of what you buy at the supermarket got increased!
Understand now, how the Congress is more responsible than just the President for the current deficit scenario?
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Tags: Banking Crisis, Corney's Model, Financial Crisis, Geithner, IRS, Stimulus Bill, Taxes
