Author Question: Use wars of attrition to explain the debate about deficit reduction. What will be an ideal ... (Read 29 times)

xroflmao

  • Hero Member
  • *****
  • Posts: 515
Use wars of attrition to explain the debate about deficit reduction.
 
  What will be an ideal response?

Question 2

Explain what a PAYGO rule is.
 
  What will be an ideal response?



lkoler

  • Sr. Member
  • ****
  • Posts: 358
Answer to Question 1

When country is facing large budget deficits, both parties in congress want to reduce the deficit, but they disagree about the way to do it: One party wants to reduce deficits primarily through an increase in taxes; the other wants to reduce deficits primarily through a decrease in spending. Both parties may hold out on the hope that the other side will give in first. Only when debt has increased sufficiently, and it becomes urgent to reduce deficits, will one party give up. These situations are reffed as wars of attrition. The fights between Congress and the Obama administration on how to reduce the large deficits triggered by the crisis are mostly driven by disagreements on whether deficit reduction should be achieved mainly through spending cuts or mainly through tax increases.

Answer to Question 2

A PAYGO rule requires that any newly proposed government program will have no effect on either the current or future budget deficits. This implies that proponents of a new program must either propose tax increases to pay for the program or cuts in other programs.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Certain rare plants containing cyanide include apricot pits and a type of potato called cassava. Fortunately, only chronic or massive ingestion of any of these plants can lead to serious poisoning.

Did you know?

Every 10 seconds, a person in the United States goes to the emergency room complaining of head pain. About 1.2 million visits are for acute migraine attacks.

Did you know?

Autoimmune diseases occur when the immune system destroys its own healthy tissues. When this occurs, white blood cells cannot distinguish between pathogens and normal cells.

Did you know?

It is widely believed that giving a daily oral dose of aspirin to heart attack patients improves their chances of survival because the aspirin blocks the formation of new blood clots.

Did you know?

Human neurons are so small that they require a microscope in order to be seen. However, some neurons can be up to 3 feet long, such as those that extend from the spinal cord to the toes.

For a complete list of videos, visit our video library