Review of National Budget

Lisa Tate

Writing Assignment 2

ECON 204-002

Michael

As a national budget, the monetary spending habits of the nation are reviewed every year and revised upon changes in the economy and choices made by citizens. Ultimately, having a budget is supposed to help to avoid a recession, but sometimes the recessions are somewhat inevitable. There are two options that the United States Federal Government have when it comes to dealing with a recession. Those options are choosing whether to help avoid slipping back into a recession or dealing with the debt or deficit. For this paper, students were asked to review policies that will be review for the 2015 budget. In reviewing for this budget, we were asked to look at what we would cut spending for and what we would support in order to balance our target goal of 2.5 trillion dollars.

In my personal experience of the game, I cut 16 policies, eliminating the 2.5 trillion from the federal budget deficit. One specific policy I decided to cut was “reduce subsidies on Fannie Mae and Freddie Mac”. Fannie Mae and Freddie Mac are loan services and “government-sponsored enterprises (GSEs) that were federally chartered to help ensure a stable supply of financing for residential mortgages, including those for low- and moderate-income borrowers.” (Congressional Budget Office, 2013) By cutting this spending of $18.8 billion dollars, we as a nation are avoiding another slip in the housing industry. There are many homes being built and if the buyers or sellers are each struggling with mortgages, there is no transfer of money, leaving issues for all people. I believe that the housing industry is a good one to support because housing is something that is necessary for all people. If homes become too expensive because that has to be the price to cover the mortgage, then no one will buy and there will be too many people without good, solid homes. By not reducing the subsidies on Fannie Mae and Freddie Mac, the nation can avoid...