Deficit – Article Example
Running Head: ABBREVIATED OF YOUR CHOICE (all caps) and Section # of Deficit The article ‘Deficit tops $1 trillion again’ has been extracted from CNN Money and is written by Jeanne Shahadi. The objective of this article is to shed light on the budget position of the fiscal year 2010.
The writer has admirably conveyed its idea to the intended audience. It has also illustrated the position and compared it with the former years with the help of a pictorial.
Figure 1: Deficits/ Surpluses as percentage of economy
At the same time, Jeanne provides logical reasons for the decrease in the current deficit compared to the former year based on facts and statistical evidence. She also follows a rational route in portraying her clarifications.
According to the federal sources, the government of United States shelved $1.29 trillion in the budget deficit 2010: the second highest deficit in real terms. It represents 8.9 percent of the economy. As compared to this, the deficit at the end of the 2009 was $1.42 trillion in 2009. The analysts believe that the economy is regaining good health. (Sahadi, 2011)
According to the economists, the decrease in the deficit is due to the reduced spending by the government as well as higher taxes applied on the population. The government cut their spending by 1.8 percent whereas the tax collection increased by 2.7 percent. (Sahadi, 2011)
The corporate tax revenue saw an increase as compared to last year citing the more important recovery of the economy. At the same, the individuals’ tax revenue declined due to the double-digit unemployment rate persisting in the society. (Sahadi, 2011)
The reduced spending was largely due to the reduced costs of the Troubled Assets Relief Program and mortgage houses. Apart from this, the spending has increased on the unemployment benefits being provided to the citizens. (Sahadi, 2011)
The interest rate remained low citing the confidence and buoyancy of the investors in the government. According to analysts, the economy believed strongly that the government would be able to services its debts. The federal government paid $414 billion in service over its debts in the fiscal year 2010. (Sahadi, 2011)
The economy is healing itself with the increasing international sales, revenues as well as stable interest rates. But the fiscal experts worry about the long term problem. They believe that the structural deficit will continue to groom in the coming years much faster than the economy itself. They deem it necessary to bring the debt under control through strict policies and procedures.
Jeanne Shahadi has conveyed the point in a coherent and logical manner. She has based her argument on statistics as well as facts. Therefore, I believe the article is well written.
Sahadi, J. (2010, Oct 17th) Deficit tops $1 trillion again. Retrieved from http://money.cnn.com/2010/10/15/news/economy/treasury_fy2010_deficit/index.htm on Apr 15th 2011