Critical Economic Challenges in the U.S.

Critical Economic Challenges in the U.S.

December 19, 2012

Critical Economic Challenges in the U.S.

The presidential elections are over and a new congress and senate are getting ready to settle in for a long ride. But things are not as rosy as one might think. For decades now America has been facing an over whelming economic challenges. While the U.S. stands strong in many areas they continue to struggle to in others such as debt, unemployment, and poverty. In my opinion two of the most pressing economic challenges that the U.S. must overcome is the fiscal cliff and growing poverty rates.

The fiscal cliff was a series of tax cuts that was started implemented by Congress under the Bush administration in 2001 and 2003 (Ungar, 2012). These tax cuts were intended to help out American households overcome a struggling economy. In 2010 unemployment rates continued to skyrocket and Congress extended the tax cuts with the Tax Relief Unemployment Insurance, Job Creation Act, extended some of the tax breaks in President Obama’s 2009 stimulus bill, and temporarily reduced the Social Security payroll taxes. With the deficit still growing and the economy still struggling, Congress passed the Budget Control Act of 2011. This law forced spending caps on discretionary spending through 2021 and created as special bipartisan congressional committee whose mission was to reduce the deficit by at least $1.5 trillion over 10 years (Ungar, 2012). Unless Congress Since the committee failed to agree on a plan the automatic $1.2 trillion in budget cuts over 10 years are now scheduled to take effect, beginning in January unless Congress can come to an agreement before then. If the automatic budget cuts go into effect and the temporary tax cuts that were approved under both Bush and Obama are allowed expire at the same time this could send the U.S. economy into a major depression. Rick Ungar states in his article The Fiscal Cliff Explained “the average American household will be...