Answer to Question 1
Answer:
An ideal response will:
1. Outline the factors that contributed to the 2008-2009 financial collapse, including the housing bubble and the investment crisis.
2. Describe how Congress reacted, noting the various bank bailouts (e.g., TARP), automotive industry assistance, and financial institution overhaul efforts in 2010.
3. Lay out a specific course of action that would minimize these effects in the future, including efforts to reregulate the financial and housing sectors, or alternately argue why government should not guarantee against risk.
4. Provide a clear and concise conclusion.
Answer to Question 2
Answer:
An ideal response will:
1. Examine the various deficit-spending-control measures that have been put forth.
2. Analyze the potential of each, noting that government must curtail spending, or taxes must be increased, or both. However, very few politicians are willing to accept responsibility for setting forth specific spending reductions or tax increases. Possible choices include: reducing federal employment; raising the retirement age to collect Social Security; health care restrictions; altering the tax code to eliminate loopholes and promote corporate investment; and reducing defense spending and earmarks by Congress.
3. Offer a conclusion naming the most promising deficit-spending-control measure or measures, and describing why the student thinks they are so.
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