Strategies for economic prosperity

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Article 1
Strategies for economic prosperity
Mark Whitehouse and Greg Ip. July 29, 2006.
Economic growth
Mark Whitehouse and Greg Ip in their article on economic growth explain on the price
rise as well as on growth slow. Explains that during economic expansion, prices and wages are
increasing, a potentially noxious mix for a Federal Reserve will try to contain inflation without
triggering a recession. According to an advance estimate made by the commerce department
economic activity slowed as a result of builders putting up fewer homes and consumers cutting
on spending.
Economists explain that slowing growth and rising prices will continue to complicate
Fed’s task of deciding what level of interest rates is high enough to contain inflation. However,
it’s not so high to slay out economic growth. Between April and June inflation grew at a rate of
2.5% whereas the core personal consumption index rose at an annualized rate of 2.9% in the
second quarter. More so the level of worker’s wages and benefits rose at 3.6%. Once the Friday
report was released investors took up the vision that Fed would be more likely give the economy
a break by holding the interests steadily at 5.25%. This report confirmed the predictions of the
economists that cooling house market as well as the consumer spending will take a bite out of
economic growth.

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However, some economists had the hopes that business investment as well as improving
the foreign trade would offset declines in spending and construction. This only came partially. A
different report indicated that people may not be inclined to cut spending sharply. Another
economist noted that the gap that existed between the wealthiest third and the poorest third
consumers reached its widest pint in 20 years.
According to a research conducted by the commercial department the rate at which the
economy of U.S can grow without sparking inflation might be lower that it was believed
previously. This report makes Fed conclude as a cause of alarm. The Bureau of Economic
Analysis however blamed the less computer investment as the cause to the downward revision of
GDP.
Article 2
Extensive long term unemployment insurance programs
Anonymous. October 18, 2013.
Unemployment
Article by Anonymous on unemployment explains how there is extensive long-term
unemployment insurance programs in U.S. Economists were able to compare results in counties
that adjoin but located in different states. They were able to separate the effects from these
regions because they are closely located to each other. The closeness means the regions share
weather, industry, culture and may be their housing markets. Thus the economists as a result are
able to identify the differences that result during the unemployment insurance duration.
According to the study carried out places with more unemployment generosity were worse off
that the others that were less.

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Under the American public policy unemployment insurance is thought as an act of
compassion as well as simulative intervention to prevent any form of vicious cycle. This helps
prevent a situation where those in the joblessness cycle begetting more jobless. At some point
Great Recession increased the unemployment insurance period to 99 weeks hence increasing the
unemployment levels. Instead he should have supported a recovery of the situation. Thus border
counties that expand the unemployment benefit duration bring about a drastic rise in the levels of
unemployment.
The authors further explain that extended unemployment benefits cause a subsidy in
employment and discourage workers in their surplus of labor. However, according to them the
real problem is that of job creation. There are no enough jobs for all hence the levels of
unemployment remain high. To bring down these levels entirely depends on the rates at which
employers provide job opportunities and not the effort made by people to search for jobs.
Long-term unemployment benefits deter job creation since it creates an upward pressure
on wages hence reducing the potential of employers of making profits. Thus liberals conclude
that if the level of unemployment has to decrease then employers should be enabled to prosper.
Article 3
Effective federal budget planning
Nahmias. January 25, 2013. Retrieved From
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Federal budget
The article on federal budget by Nahmias, Laura in Wall Street Journal aims at
explaining how the New York state is coming up with plans to enhance a budget shortfall. The
government aims at reducing the much they spend to pay to pay for the healthcare of the severely

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disabled people in the society. The health care officials thus have to come up with a plan that
will squeeze the expense between $800 million and $1.1 billion to be used to cater for the
developmentally disabled people in nine state runs centers. The $800million is to be spent to
construct the centers whereas the $300 million are to fund the additional services rendered to the
patients.
Back in 1990 the state and federal government had agreed on a pricing methodology
program but later in 2012 the program was rendered inappropriate by a US department. Each
year some of the money was used by the state for general spending but a Republican- led
congressional oversight accused New York of fraud. This has forced New York to negotiate a
new pricing system so as to prevent such a problem in the future. The process of balancing the
budget is being complicated by the looming deficit. There are thus ongoing discussions to
resolve the deficit that averages to $1.35billion and actively evaluate ways to manage any forms
of revenue loss.
One of the most expensive parts of the program is to pay for the clock assistance and
training as well as intensive clinical and direct-care services and therapy rendered to patients.
These patients who mainly suffer from sever autism, cerebral palsy among others live in state run
development centers. To soften the expense blow the state considers several other options such
as shifting some federal aid to other places in the budget. They also opt for a reimbursement for
emergency medical services for some immigrants who are not eligible to the Medicaid service.
A lot of fear exists among the service providers if the federal funding doesn’t materialize.
More so are afraid that funding cut will force closure of some state run institutions hence more
patients being moved to private sectors. However, there is more fear of what impact this will
have on the entire state’s finances.

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Article 4
Effective social security measures
Paletta. April 24, 2012.
Social security
In Paletta Damian article on social security there are given details about the United States
social security funds that are responsible for paying retirement benefits to Americans and
Medicare for disabled. The funds have been helping many American with disability and during
retirement but they are facing number of challenges with them facing and end in the near future
if the government does not take long term measures.
Among the most federal budgeting consuming public programs include the social
security fund, Medicare, and the government-run health plan for the senior citizens. since 2011
the congress lowered the payroll tax that fund social security to re channel the fund to economic
growth resulting into treasury department making payments for the lost revenue to social security
funds.
Some recent studies have shown that the social security fund will exhaust its reserves by
2033 contrary to an earlier report that had predicted three years late than this. The report
possesses pressure to the government and politicians due to changing the people’s trust which
would affect the votes. Reserve for the disability benefits are most affected with a prediction of
their exhaustion by 2016. If the disability and retirement benefit under separate trustee would be
combined, they would be exhausted by 2033. This data seems to defer with the result reported
last year. If the trust funds exhausted, the benefits would be cut by 25% according to a
government data a situation not desirable especially with the expectations of rapid increase in the
program cost due to ageing population.

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The solution to the matter has been left to the republican and the democrats in a battle on
public spending though the program financial problem remain decades away and be used as an
agenda in convincing the voters. The congress and the senate are determine the fate of the
program with them finding difficult to pass it due to political differences.
The challenge currently faced by the funds is the facts that the disability benefits and
Medicare program are paying more than they are collecting. The difference is being covered by
use of the balances that were built up when the funds were collecting than spending. The
government also borrows money from the funds and pays it with interest increasing the amount
available. With continued strangle with the government and the opposition it is hoped they will
come up with measure to address the challenges and empower the funds to support many
Americans.
Article 5
Cutting federal government spending
Paletta. February 23, 2013. Retrieved From
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Federal government spending
The aim of Paletta Damian was to talk about how the federal government spending would
be cut under the sequester which was as a result of the deficit decrease deal that was struck by
the White House and congress in summer 2011. This also raised the borrowing limit of the
government and more so fits within Washington’s broad yet stuttering efforts to bring down the
budget deficits to sustainable levels. The condition that was needed by the republicans so as to
vote to raise the debt ceiling was a significant spending cut. The parties came to conformity to
increase the debt ceiling and more so put into practice new caps spending which would save

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$917 billion. Since both parties knew they needed more deficit reduction to win Republican
support White House processed a process to force lawmakers to craft a deal. They first would
create congressional “supercommitte” of members from both parties to strike the deal so as to
lessen the shortfall more. That’s when the White House planned the sequester that would act in
case the committee failed. Democrats and republicans finally came to an accord to split the
spending cuts over nine years starting 2013.
The impacts would be felt immediate whereas others months later. Agencies will adjust
their prices while others months later force their workers to take unpaid leaves. The agencies will
also send letters to contractors and more so the authorities informing them on the cuts.
Most agencies such as departments of labor, defense, and national institutes of health
among others are affected whereas others are left out. Those that are left out include the military
pay for uniformed personnel, Medicare and Medicaid as well as the U.S postal service whose
revenue sources are outside the federal budget. The cuts shall be split into three broad categories;
defense spending, non-defense spending and Medicare but among all the federal projects and
other extended subprograms and projects.
The cuts need not essentially be spread uniformly over the remaining period. The
agencies are allowed to apportion the cuts in accordance to their wish but spread them out to
reduce the impact concentration. In general, the means of the cuts are concentrated on a lesser
pool of government programs.