Analysis of crisis, skewed values, and institutional accountability

Tax Cuts

The current economic circumstances of the United States are dire. Political strategists and economic specialists have been trying to formulate plans for how to alleviate the situation and save the economy. Many have argued that the most important step in economic recovery is in the creation of new jobs so that the current unemployment, which is now more than 10%, will lessen. This is very important, but another step in recovering the economy is to determine how taxes should be utilized. Some argue that raising taxes will pump more money into the economy. Those people however, are neglecting the fact that there are so many people out of work. This places a higher burden on the working class citizens of America who are forced to pick up the slack. With more money going to taxes and less funds on hand, more people are losing their homes and going into debt which only worsens the situation for all those involved (O'Sullivan 2003). However, by decreasing taxes, people will have more money which allows them to spend money on other things, pumping money into their local economies which then creates a domino effect, improving conditions across the country.

In Congress, Republicans and Democrats are arguing over the potential for economic growth that would come as a result of lowering taxes. One of the problems is that the Bush-era tax cuts really only focused on the super wealthy; people who don't have to be concerned over whether or not the need to pay taxes will prevent them from making a mortgage payment (Johnson 2010). Obviously tax cuts to only the very wealthy will not bring about the economic reversal the people of this country so desperately desire. Instead, tax cuts must be made across the board if they are to aid in the recovery of the economy.

Currently, the government has more or less blanket regulation regarding taxation which is most often determined by tax bracket. However, were this country in possession of a proper discretionary fiscal policy, then the poorer populations could receive much-needed tax cuts without providing similar accommodations to the wealthy populous (Krugman 2011). Were the system better constructed, there would be less of a lag time between the recognition of need and the formulation of strategy to combat that need. There is far too much infighting within the partisan government which prevents anything but party lines determining what the proper course of action out to be.

If this is not yet feasible, an increase in the desire to create an expansionary fiscal policy could potentially help the current economic crisis (Biggs 2010). The government, already severely in debt could increase spending within the nation, providing funds to smaller businesses or given monetary aid to groups which would employ other people. This process also requires a decrease in taxation, particularly of the lower and middle classes. It would also require transfer payments which send funds from the government into the household sectors. It is unlikely that the United States government will employ this policy because it requires allocation of funds away from direct governmental interests.