Fantasy Land

The President's bi-partisan debt crisis committee has released their prescription for reversing the tailspin our country's finances have taken. Click on the link to access the tough remedies and then imagine all of the excuses they'll be for why we can't implement them.

Let The Bush Tax Cuts Expire

Though it seems illogical to, in effect, raise taxes during an extreme bout of unemployment, the article suggests just that. The author states that tax cuts are an inefficient form of expansionary policy because people are often inclined to save a portion of what they don't pay to Uncle Sam. Instead, the increased revenues could be used for direct stimulus that would be applied exclusively to the wounds still out there.

Staring Into The Abyss

Too Early To Pull-back?

Paul Krugman bemoans the movement toward austerity among the world's legislators before the global economy recovers.

Budget And Fiscal Policy

This is an assignment in which your students access online resources to answer questions and further their understanding of debt, deficit, budget, and fiscal policy.

IOUSA

This is a video from the Peterson Foundation, currently led by former Comptroller David Walker. It puts the messy fiscal scene in perspective.

Roosevelt Recession Reprise?

In 1937, thinking the economy was back on its feet, the Roosevelt administration began a return to austerity after the "extravagant" spending of the New Deal. The result was a double dip with unemployment levels returning to 17% and the GDP contracting. The mood in Washington now is to reign in deficits and roll back the stimulus. The author of this article believes it to be premature and that it will stir the ghosts of 1937.

States Ease Restrictions On Vice To Fill Budget Gaps

The Financial Turmoil Of The Average Family

Clicking on the title takes you to a large graphic with great detail about the average American family's finances. It's frightening!!!

Where Will Your Tax Dollars Go?

For context, here's the spending breakdown for some of the big-ticket items in 2009, based on the numbers in this CBO report:

Defense, 18%
Social Security, 18%
Medicare, 12%
Medicaid, 7%
Interest, 5%

"A Pernicious Disconnect"

Where Do State Revenues Come From?

This article and accompanying chart express the wide variety of ways states generate their income. This provides a window to the regions of the country that may recover more quickly and those that will lag when the economy rebounds.

Who's Paying Taxes?

Balancing The American Economy (video)

Paul Krugman on "crowding out".

A must read for AP Macro teachers: Paul Krugman explains why deficit spending during a recession does NOT cause crowding-out

America and Its Deficits: Are We Broke Yet?

America and Its Deficits: Are We Broke Yet?