any expert economics

WRITING ASSIGNMENT Due: Wednesday, November 18, 2015 (in class)

The paper should be exactly 3 pages long (including a cover page); one and half spacing, 11 point font. You may use narrow margins. Furthermore, you may also use an additional page for appendix where you can place your graphs. The criteria for determining your grade is as follows: organization, clarity of expression, general exposition of the material, and analytical content. Read the paper very carefully. PLEASE NOTE: NO MORE THAN 3 PAGES TOTAL; A COVER PAGE PLUS 2 PAGES OF WORK AS PRESCRIBED IN THE INSTRUCTIONS THAT FOLLOW. AN ADDITIONAL PAGE IS PERMITTED AS AN APPENDIX FOR GRAPHS.

Article: U.S. Senate Passes Budget Bill, Averting Risk of Default – Kristina Peterson

(The article is posted alongside these guidelines) INSTRUCTIONS

a) The first part of this assignment requires that you present a summary report of the article, but you must address the following in the summary, and in the order specified. Do not use direct quotes from the paper. Paraphrase instead.

1. What is the main issue being addressed, i.e. what is the paper about? Focus your description on the key macroeconomic issues and variables being addressed. 2. Why is it important for the issue you identified to be researched? Why should people and/or policy makers be concerned about the issue? 3. What are the main findings mentioned in the article, i.e. what are the main observations and conclusions. What did the author discover about what he set out to write about? Note at least 3 key findings relevant to the issue. This part of the paper should be divided into sections, with each section addressing each of the areas outlined above with headings. Below is an example of section headings.

I. The main issue II. Importance of the study III. Main findings

This should constitute the first page of the paper. Do not put content in this part on the second page. Keep this part on page 1 only.

b) The second part of the exercise requires you to answer the following questions. This is where you apply knowledge on the issue from theories and concepts discussed in class. Each question should be answered in a separate paragraph. You do not need section headings here.

1. What are the specifics of the budget deal that the U.S. Senate passed this past week? What would have happened if a deal was not reached by November 3? 2. How will the upcoming changes to government spending affect the U.S. economy in the short run, according to macroeconomic theory? Explain the process by which this happens, indicating the effect on the price level and output. Support your answer with the aid of a well-labelled AD-AS diagram 3. Explain the impact of the budget deal on the following variables: household consumption, business investment, private savings, public savings, and unemployment. 4. i)What is the main benefit of increasing the federal debt limit? ii)Is there an argument to be made for not increasing the debt limit? iii) Explain which option you would argue, is better for the U.S. economy in the long run, and why. NB: You argument must be theoretically sound. In other words, use economic theory to support your stance. *This should constitute the second page of the paper. Only keep content for the second part on the second page. Make sure you adhere to the above stipulations. If you are not clear on any instruction, ensure to ask me before turning in your work.

Document 1 of 1 U.S. Senate Passes Budget Bill, Averting Risk of Default; Legislation would boost spending for next two years, raise debt limit Author: Peterson, Kristina ProQuest document link Abstract: The bill's passage enabled former Speaker John Boehner (R., Ohio) to turn control of the House over to newly elected Speaker Paul Ryan (R., Wis.) on Thursday with no ominous fiscal fights on the horizon. Links: Find It@ CSUF Full text: WASHINGTON--The Senate early Friday passed legislation boosting spending levels for the next two years and raising the debt limit in a move to curb major fiscal fights until a new administration is in office. The bill, already passed by the House this week , now goes to the White House for President Barack Obama's signature. Friday's early morning vote of 64-35 will enact a sweeping deal that came together only days before. Congressional leaders reached an agreement with the White House late Monday increasing spending by $80 billion through September 2017 and increasing the federal government's borrowing limit until mid-March 2017. The Treasury Department had warned that Congress had to raise the debt ceiling by Nov. 3 to avoid risking a default on the country's debt. Senate Democrats embraced the bill, which raises spending evenly for both military and domestic programs: $50 billion in fiscal year 2016 and $30 billion the following year. The deal is the second two-year agreement to relax the sequester, a series of across-the-board cuts that took effect in 2013. The previous deal ended in September. The latest agreement split Republicans , dividing those who wanted to see higher defense spending from those who said the bill didn't extract enough spending reductions in exchange for increasing the debt limit. "We will be giving President Obama a free pass to borrow as much money as he can borrow in the last year of his office," GOP presidential candidate Sen. Rand Paul of Kentucky said on the Senate floor Thursday beside a poster of a mock "unlimited credit card" issued to Mr. Obama. GOP leaders said the agreement secured some changes to federal safety-net programs and ensured two years of fiscal stability for the military at a time of national security threats. And they told lawmakers it was better than the alternative: an increase in the debt ceiling with no policy measures attached. "This is a fully-offset agreement that rejects tax hikes, secures long-term savings through entitlement reforms, and provides increased support for our military--at a time when we confront threats in multiple theaters," Senate Majority Leader Mitch McConnell (R., Ky.) said Thursday. The bill also includes patches to two federal safety-net programs that lawmakers wanted to quickly resolve before election-year pressures intensify. It will extend the solvency of the Social Security program used to help support disabled people and prevent an expected 52% increase in premiums for roughly 30% of the people enrolled in Medicare Part B, which covers outpatient care such as doctor visits. Friday's action reflected the challenges of scheduling a vote around senators' complicated weekend itineraries and a desire to pass the legislation before any further delay could unsettle markets eager to see the debt limit raised. Many lawmakers plan events in their states beginning on Friday, and the five senators running for president have even more demanding schedules. The bill's passage enabled former Speaker John Boehner (R., Ohio) to turn control of the House over to newly elected Speaker Paul Ryan (R., Wis.) on Thursday with no ominous fiscal fights on the horizon. Lawmakers will have to pass a detailed spending bill in December that could spark debate over policy measures.

10 November 2015 Page 1 of 2 ProQuest

"I have to admit that I was skeptical when he said that he wanted to clean out the barn before he left," Senate Minority Leader Harry Reid (D., Nev.) said of Mr. Boehner's plans to resolve thorny legislative issues before his departure Thursday. "But he found a way...by passing a clean debt limit and a two-year budget agreement, which should go a long way to returning the appropriations process to the way it should work." Mr. Reid also warned Republicans not to try to stick ideological policy measures to spending bills, foreshadowing a fight that is likely to return at year's end in one of Mr. Ryan's first major tests as speaker. House Appropriations Committee Chairman Hal Rogers (R., Ky.) said this week that lawmakers planned to start work "right away" to divvy up the deal's overall spending figures into appropriations bills that set spending levels for different parts of the government. Those measures are likely to be combined into one large bill, known as an omnibus, that must be passed by Dec. 11, when the government's current funding expires. Write to Kristina Peterson at [email protected] Credit: By Kristina Peterson Subject: Bills; Agreements; Leadership; Legislators; People: Paul, Rand, McConnell, Mitch Company / organization: Name: Republican Party; NAICS: 813940; Name: Congress; NAICS: 921120; Publication title: Wall Street Journal (Online) Pages: n/a Publication year: 2015 Publication date: Oct 30, 2015 Section: Politics Publisher: Dow Jones & Company Inc Place of publication: New York, N.Y. Country of publication: United States Publication subject: Business And Economics Source type: Newspapers Language of publication: English Document type: News ProQuest document ID: 1728206487 Document URL: http://search.proquest.com/docview/1728206487?accountid=9840 Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission. Last updated: 2015-10-30 Database: ABI/INFORM Complete,ProQuest Newsstand

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