2010年4月29日 星期四

RRJ3

Sky
EAP1
April 12, 2010
Business Economic
Reference:
Sahad, Jeanne (2010, April 12). ‘Earthshaking’ ways to fix U.S. debt, republished by CNN.
Retrieved April 12, 2010, from
http://money.cnn.com/2010/04/12/news/economy/reducing_defict/index.htm
Summary:
According to ‘Earthshaking’ ways to fix U.S. debt, the U.S. government will find some ways to cut U.S. debt. President Obama’s bipartisan fiscal commission will meet to talk about it in a few weeks. It is impossible to cover all of the debt, so this commission will decide how to control the increase of debt compared to the economy. This commission will try to set the debt below than 3% of the GDP starting in 2015. They have three ways they can do this, raising taxes, cutting spending or by doing both. Now nobody knows which opinion will be best. If the commission chooses raising taxes to decrease the deficit, they will increase by taxes one-third. The taxes focus on highest-income families. The second way will only reduce spending. Sullivan said that spending cut by 40% discretionary spending without Medicare, Medicaid, Social Security and interest on the debt. A plan which would include both raising taxes and cutting spending would result in a tax raise of 8% and a spending cut of 7%. This option might be recommended by the commission, according to Sullivan. If the plan works, it will lead to a fall of debt to between 70% and 75% of the GDP by 2018. But for achieving the goal which is to reduce the deficit to 60% of the GDP, actions like tax reform, budget reform and changes to major programs such as Medicare and Social Security would have to take place in the future.

Reaction:
The U.S. debt is a serious problem for President Obama’s fiscal commission. Is there a simple reason why no U.S. president ever reduces the debt? Because they just know how to keep their job and get a good reputation. The next president will again deal with the debt. Outside, many countries like to buy American bonds. They think it is a good and safe way to the value of the money like China and Japan. China and Japan are the top two credit countries in the world. America uses it bonds to control other countries’ economics. When the American government thinks they cannot pay enough money to the credit countries, they will reduce the exchange rate, which if a country has some American bonds they will lose money. These countries lose a lot of money, and they have no way to resolve it. Inside, high taxes bring vast stress to the middle class, which is the most important contributor for the GDP. As for the highest-income families, they have enough money to survive. The taxes are like a mite on an elephant in their spending. The lowest-income families can return the taxes. Only the middle class avoid paying more money than is possible, because they will use much more money to get the same thing as before. The increasing rate will affect their life’s levels. So the government workers first think of how to help people increase their income instead of helping them keep their jobs.
Vocabulary:
Debt: a specific sum of money or a performance due another esp. by agreement (as a loan agreement).
Fiscal: Of or relating to government expenditures, revenues, and debt
Gross domestic product: The total market value of all the goods and services produced within the borders of a nation during a specified period.
Tax: a charge usually of money imposed by legislative or other public authority upon persons or property for public purposes
Budget: An estimation of the revenue and expenses over a specified future period of time.
Proposal: the act of offering or suggesting something for acceptance, adoption, or performance.
Policy: a course of action adopted and pursued by a government, ruler, or political party.
Lawmaker: a person who makes or enacts law; legislator.
Revenue: The dollar amount of sales during a specific period, including discounts and returned merchandise. It is the "top line" figure from which costs are subtracted to determine net income.
Discretionary spending: spending set by annual appropriation levels made by decision of Congress. This spending is optional, and in contrast to entitlement programs for which funding is mandatory.
Medicare: a U.S. government program of hospitalization insurance and voluntary medical insurance for persons aged 65 and over and for certain disabled persons under 65.Compare.
Mandatory spending: funds not controlled by annual decision of Congress. These funds are automatically obligated by virtue of previously-enacted laws.

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