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Fiscal Policy: U.S. Congress 2012 Budget

Please help me with the following question:

The U.S. Congress is currently debating the new budget (2012). Most Republicans want to reduce federal spending. Democrats do not want to reduce federal spending by as much as Republicans do.

Should federal spending be drastically reduced? Yes or no?

Thank you.

Solution Preview

I have included a sample response. Lot`s of interesting reading on this topic, look at Paul Krugman or Greg Mankiw`s blog for inspiration. I have sided with the democrats. If you use my response as a guide, arguing the other side would be fairly straight forward. You may want to focus on the argument that bond investors will punish the U.S. with higher borrowing costs if they do not act.


The recent debate about the United States federal budget has ...

Solution Summary

This solution discusses the debate in the U.S. congress over the new budget in 2012, and weighs in on the Democrat and Republican positions regarding cuts to federal spending. Additionally, this solution provides some suggestions regarding further sources of information on the subject to explore.