It is a known and accepted fact that Barack Obama’s preferred policy with regards to tax is to increase the liability of the wealthy, while easing that which rests upon the shoulders of low and middle income households. This is a measure that is apparently well supported within the US government, with a vast majority of Republicans, Democrats and Independent representatives all in agreement that individuals or households who earn more than $250,000 per year should bare the brunt of plans to reduce the national deficit.
Not only this, but US citizens also seem to agree that this is the most positive step that their government can take with regards to taxation. The New York Times recently revealed in a poll that an estimated 72 percent of adults approve of increasing federal taxes on households earning $250,000 per year or more, which is a significant portion of the voting demographic in the US. Though this suggests that the government and its subjects are in accordance, there are economic and ethical issues concerning such a practice within a free and democratic land.
A Thriving Economy
From a purely practical standpoint, there are two significant reasons why increasing the tax liability of the rich would be either inconsequential or potentially detrimental to the economy. Firstly, given the effects of the global recession and subsequent recovery, there are a paucity of individuals and households who earn more than $250,000 in the US. This means that by targeting this demographic as opposed to imposing a 1 percent increase on each level of household income, the government will acquire far less reveneue over the next decade than they have the potential to.
With gas prices set to rise beyond the $4 mark across the US, citizens are finding themselves trapped within a vicious cycle of economic hardship. The current price, which is based on the inflated cost of oil, has already risen to its highest point since July 2008, and economists are predicting that that $4 price for gas may take hold nationwide throughout July and August. This, in line with high unemployment and increased cuts in public expenditure, is creating the likely prospect of the nations economy grinding to a shuddering halt.
The Factors in Economic Growth
There are two significant factors which drive capitalist economic growth. The first of these is enterprise, and the investment in businesses that to allows them to expand their operations and hire new staff. This then follows in to the second factor, which is consumer activity and the revenue that citizens reinvest into the economy. By itself, this is the single most important influence on the financial growth of the US, but it is in part reliant on an environment where people are able to work and earn a regular salary.
In an environment where both independent enterprise and consumer spending is hindered, it creates a distinct cycle of economic hardship. This is debilitating for both the federal government and private sector growth, but also has a deep and perpetual impact on the day to day existence of citizens. As is typical with these types of circumstance, one factor often influences the other, so as long as citizens are unable to find employment and earn any semblence of disposable income, so too they are forced to reduce their levels of expenditure and tighten their financial belts.
Yesterday we discussed the current stalemate facing the US government, and the potential for a federal shutdown that would have a discernible impact nationwide. However, while opposing factions of government and personal persuasion are having a stalling effect on the negotiations, it is interesting to consider exactly what the consequences would be should a resolution fail to be reached by midnight on this coming Friday.
Of course he concept of a federal government shutdown, whether it be partial or more widespread, is one that causes great concern for citizens. However, it is a rather vague and ill defined notion, and one that gives little indication as to the exact implications for society at large. So, what would be the immediate or long term consequences of enforced government inactivity, both in terms of the nations financial performance and the welfare of its workers and citizens?
The Financial Implications for a Nation
Financially, the partial closure of government institutions would be especially troublesome, and would create specific issue with regards to tax assessments and the funding of public sector ventures and small business enterprises. In a depressed fiscal climate, the forced inactivity of public sector bodies and their workers will only serve to slow the processes of economic recovery, and create an unhealthy cycle of increasing unemployment and subsequent closure of small and independent businesses.
Of all the uncertainties that exist in the contemporary world, you would not include the function of your government as being amongst them. Regardless of the popularity of it’s actions or the results of their decision making processes, the government are omni-present in our day to day existence, making conscious and considered strides towards a state of sustained prosperity. However, as democratic and republican representatives failed to reach a budgetary agreement this week, the US is now facing up to the prospect of a partial federal shut down.
The US government have until midnight on Friday to reach an adequate compromise, and ultimately present a clear and concise expenditure plan to ease the nation through its period of economic recovery. However, with warring political factions at odds over the course the country should take and who is responsible for the vast budget shortfall, an agreement seems to be moving further away from the grasp of those who seek to protect the citizens of the US.
An Need for Compromise
Significantly, both parties are opposed in exactly how to reduce the budget deficit, and which areas of public spending should be cut to negate the crippling economic shortfall. While this is understandable when you consider the conflicting principles of each party and their own individual interests, this verbal war of attrition is influenced by other less relevant factors. Of these, the apportioning of blame and responsibility for the nations fiscal woes appears as the most significant.
The US is currently at the mercy of harsh and strained economic conditions, and its middle and lower classes are exposed like at no other time in their recent history. This period of fiscal tumult is also proving a catalyst for alternative social issues, such as benefits protests from public sector workers and a steady rise in national hate groups within the countries boundaries. One of the most significant issues within the contemporary USA is increasing poverty, especially in the face of steadily climbing food and fuel prices, which is threatening to create a significant divide between the north and south of the nation.
The Basics of a Strained Economy
The fiscal circumstances of the current US are of course a reflection of the recent recession and subsequent painstaking recovery. The main issue with a recession of this nature is its presence as a vicious and divisive cycle, that often sees unemployment rise and citizens unable to contribute to an economy. As a consequence, governments are coerced into reducing spending and inflating taxes and prices, creating a situation where basics such as food and drink are more expensive and increasingly out of the reach of struggling citizens.
When a country is at the mercy of fiscal or social constraints, it is inevitable that a faction of its citizens will react in an emotive manner. This is indicative of any society, where certain personality types are prone to the acts of irrational and impulsive behavior. However, while this is accepted as the consequence of enhanced stress and a challenged standard of living, recent statistics have suggested that an increasing number of hate groups are emerging throughout the US.
The term ‘hate group’ is a rather generic and vague media term, but in fact applies to several different demographics of society. These groups are essentially radical right wing ensembles, who generally stand against various types of government and government reforms. Patriot and Nativist groups are relevant examples active in contemporary American culture, and share the common if misguided notion that the US state is their primary enemy.
The Facts of Right Wing Groups
The statistics are indeed significant, and reveal that 2010 saw a vast 7.5 percent increase in the number of hate groups who operated within US boundaries. It is estimated that 1002 hate groups are now active and progressive in the country, and this is the first time since these statistics have been tracked that over 1000 individual groups have been recorded. This number is startling with regards to both its volume and its presence in a liberal society, and points towards an increasingly dissatisfied public.