Article Summary
The issue that has arisen after the United States
Presidential Election is the divide in the Nation by power due to the majority
for the Republicans in the House vs. majority for Democrats in the Senate.
Therefore, Obama’s Policies must thereby first be passed in the House before
approaching the Senate, with such policies includes taxation. There is now an
issue in the uprising of the New Tax Resolution of the United States as the
Democrats wants to increase taxes, while the Republicans want to decrease taxes
for all levels. The day after the United States Presidential Election, the
Stock Market stumbled and fell. The Dow Jones makes its biggest drop in a year
(dropped 2.4% in a day), the S&P 500 dropped 2.4% (lowest since August),
the price of Oil dropped 5% (biggest decline of the year), Bank of America
Corp. and JPMorgan Chase & Co. slid at least 5.6 percent, and Hewlett-Packard
Co., Exxon Mobil Corp. and UnitedHealth Group Inc. lost at least 3.8 percent,
and the KBW Bank Index sank 4.6 percent. Obama is now approaching Congress to
increase the taxes by $600 Billion and spending cuts that threaten the growth
of the United States economy. However, Obama must now negotiate with
Republicans that intend a Tax-Cut Extension for All Income Levels.House Speaker
John Boehner states that they will be willing to agree to a new revenue from a
tax system that would generate faster economic growth which leaves a divide
in the beliefs of taxation, as whether allowing Economic Growth as source of
revenue or standard taxation policies. This divide is the exact conditions
required to lead the United States economy to the great concerned Fiscal Cliff
which in fact may lead to a global recession like that of the 2008 recession.
Relation to the Course
This article has much content related to this Economics
Course. They are described in the following points:
This article
also demonstrates a variety of different Economic methods. It demonstrates
different examples of positive statements. Examples include the following:
Positive
Economics (Descriptive Statement – facts portraying things as they are in the
present or have been in the past): the Stock Market stumbled and fell.
The Dow Jones makes its biggest drop in a year (dropped 2.4% in a day), the
S&P 500 dropped 2.4% (lowest since August), the price of Oil dropped 5%
(biggest decline of the year), Bank of America Corp. and JPMorgan Chase &
Co. slid at least 5.6 percent, and Hewlett-Packard Co., Exxon Mobil Corp. and
UnitedHealth Group Inc. lost at least 3.8 percent, and the KBW Bank Index sank
4.6 percent. This is a clear
demonstration of a descriptive statement as it simple portrays stats as they
were, perfectly meeting the definition.
This article
also demonstrated a variety of different fallacies. Examples include the
following:
Fallacy of
Single Causation (a single factor caused a particular event when in fact there
may have been other contributing factors): This article blames the result of
the United States Presidential election as the sole cause for the fiscal cliff.
However, there are many other contributing factors that would lead to the downfall
in the economy such as the expiration of the Bush Era tax cuts and other
external global economic influences.
Types of Economic Systems: Throughout the article, there were
major discussions regarding the different approaches to Government Taxation. It
highlighted how the Democratic approach was to earn government revenue through
a upfront taxation, contrary to the Republican approach which believes that by
lowering the taxation, we can push towards a faster economic growth, that with
even a lower tax rate, can still earn more revenue. This is where there are the
contrasting ideologies of Economic Systems. There is the Democratic approach
which takes a more Command approach, opposed to the Republican approach which
takes a more Market approach.
Types of Government: Throughout the article, there were
major discussions regarding the different approaches towards government
spending and approaches. The Democrats are a more socialist government party as
they believe that by increasing taxes, they can invest in more social programs
such as Medicare. On the other hand, the Republicans are more of a Capitalistic
government party as their top priority is Economic growth opposed to social
programs for the public.
Comments
The reason I selected this article, like the past ones, was
due to my personal relation with the content. Even before the election, I was
personally greatly concerned with this matter. After doing a lot of research
into the investment world after the great 2008 recession, there were great talks
by analysts of what would be known as the “double dip”. After doing further
research into the matter, analysts predicted if such a result occurred in the
2012 United States Presidential Election, then the double dip would be soon
approaching. This set me on the high alert, as I was sure to do much more
research into the matter when the time was approaching. This is why I selected
this article, as I was greatly concerned into the matter.
This article has also helped guide my opinion on the matter.
After doing further research to understand what this highly concerned Fiscal
Cliff is regarding, it is a great matter of interest. Firstly if it was to
happen, then there is a great possibility that there will be a global
recession, which may personally affect my life and my living standards.
Moreover, it is a greater concern for me as an investment. If I predict that
the Fiscal Cliff was to happen, then I would begin to short-sell stocks for
mass profit, and purchase mass quantities at the trough. This opens an endless
world of opportunities for me in the investment world, as I can utilize such a
tragic event for personal maximum profit. Therefore, this article is of great
importance to me, as it gave me a clear understanding on the Fiscal Cliff and its
relation to the Investment world.
No comments:
Post a Comment