More Bang for Your Buck

This article comes from the New York Times.
Leonhardt, David " The Perils of Pay Less,Get More" http://www.nytimes.com
http://www.nytimes.com/2010/03/17/business/economy/17leonhardt.html?ref=economy
Terms to Know: GDP- measure of a country's economic output.
Wagner's Law- Theory developed by 19th century economist Adolf Wagner that states as a society gets richer, its tax rates tend to rise.


This deficit modern America has been in for the past two years may carry it self on for longer than we had anticipated. As we see our society in hardship, we as human beings look to those with the ultimate power to bail us out of a mess:in this case we turn to the government. As unemployment rates continue to increase and public benefits continue to decrease, we all turn our heads to the face of our justice system to have justice served. We ask for bills on healthcare reforms, grnadiose stimulus packets, and comfortable retirement for the elderly. But how will all of those requests concequentially affect our future?

With the basic needs of the people met, we still want more. This is the foundation of Wagner's Law. Adolf Wagner believed that citizzens of richer societies usually prefer more government services. the U.S has followed this path for most of the last century but as the recession hit, its becoming harder and harder for them to follow through.The request that teh military play the protector role, good schools are available for children, and medical care is available even when it is not profitable nor a strong social safety net is hard for the government to fulfill in times such as these. The aftermath of fulfilling all of these demands may label the U.S into an even bigger deficit!

what can we do? What will happen? Well, economists predict that by 2020, govenrment spending will have projected to 26%(and rising) of G.D.P mostly because of Medicare and Social Security. Spending needs to be cut and taxes need to rise. Now if this combination is put into effect right, they will not have to reduce economic growth by much. A risk, yes, but what more can we do?