Can we balance the budget in 10 years? Center on Budget & Policy Priorities

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Multiple suggestions have been laid out during this early part of the federal budget process.  It’s a great time to bring out UFR Lesson 1.4 on Taxation and the National Debt, and use current events to bring the lesson to life.

The Center on Budget and Policy Priorities has a very interesting post on the proposed goals of the budgets in both the House and Senate.  In general, both proposals suggest balancing the federal budget within 10 years with no new revenue. Of course, this can only mean one thing – budget cuts.  “The combination of these two goals has large and serious effects, making it highly likely that the forthcoming Republican budgets will be built around policies that would increase poverty and inequality and adversely affect many low- and middle-income families. ”

This moves at least part of the discussion back to income inequality and poverty.  The CBPP states that balancing the budget is not vital, and in fact could lead to adverse effects on the economy as a whole.

With this question, have students analyze and research the essential question from Lesson 1.4:  Is there a fair and efficient way to fund and maintain the public services we want?

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Tweeting the State of the Union Address

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This is just too fun to pass up.  What a terrific way to have students able to analyze in “real time” (or, if they weren’t watching, to see now)!  Someone has tracked the timing of President Obama’s State of the Union Address, and tracked tweets during that time with hashtags that would match the topic at hand.  So, for example, when the president was talking about foreign policy, they tracked posts to #foreignpolicy.  What you get is a flow chart and map showing how many tweets (and where they came from) were posted regarding the topics covered in the SOTU address.

On the website:  Explore the speech and see the realtime reaction on Twitter. Scroll to a paragraph to see the volume of Tweets, the subjects debated on Twitter and where people are talking about them across the US. Click the spikes on the chart and see which paragraphs are being talked about most. Share your key paragraphs: each one has a unique url for you to Tweet. Video clips courtesy of C-SPAN.

See it at: http://twitter.github.io/interactive/sotu2015/#p5 

 

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Lee-Rubio Tax Plan

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The new tax plan proposed by Senators Mike Lee (R-UT) and Marco Rubio (R-FL) was released earlier this week.  It is very pro-business and growth, taking away many capital gains taxes and taxes on dividend income, while also “encouraging” the reform of the health care system.  At the same time, they urge “family fairness” in taxes, critiquing the complicated tax code and tax rates that are too high.  It would repeal the estate tax, change the Earned Income Tax Credit, and in general simplify the tax code.  In fact, it drops tax brackets to only two:  15% for singles earning up to $75,000 or married couples earning up to $150,000, or 35% for those above that rate of income.

From opposite sides of the aisle come the praise and critiques:

UFR Lesson 1.4 looks at Taxation and the National Debt.  Although the Lee-Rubio Tax Plan does not outline how to decrease the national debt, the news fits in well here.  The Essential Dilemma posed for the lesson is: is there a fair and efficient way to fund and maintain the public services we want?  The new tax proposal would affect the revenue collected by the federal government, but it will also affect those who pay taxes, whether through a decrease in the child tax credits or a decrease in the taxes that businesses and corporations pay.  How can students determine if the tax proposal is “fair”?

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2015 Economic Report of the President

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The Economic Report of the President was released a few weeks ago.  This is an annual report given to Congress on the state of the economy.  In general, the information included states that we continue to recover from the Great Recession, currently growing at a 2.8% increase in each of the last two years.  

Chapters focus on general performance, opportunities and challenges facing the US labor market, changes in the composition of the average family, tax reform, energy, and the global economy.  One interesting area of focus is the look at income inequality (mentioned earlier in this blog over the last year).  The New York Times points out that a large portion of the report actually deals with stagnating wages and income inequality. The Times, however, seems to think this is more political than a guide to easing inequality; they point out that this could be a blueprint for the 2016 presidential election.

The Wall Street Journal takes ten of the charts provided in the Report and gives an overview of the document using only those.    Economist Greg Mankiw questions which is the bigger issue – productivity slowdown or increased inequality?

This ties to a number of UFR lessons:  It could be about taxation (Lesson 1.4), or possibly about numeracy (Lesson 5.4).  Expanded some, it could be about the federal budget (Lesson 2.4).  However, I like it as a lesson on the media and political rhetoric.  Have students review and analyze how different media markets are addressing the Report, and how politicians are responding to it.  It’s not directly related to the federal budget, but who brings up the budget in relation to the Report?  Who is admitting the income inequality, and who is denying it occurs?

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ISIS and the Terrorist Threat – Political Cartoons

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The political cartoons included in this blog are selected as tools to teach about public policy issues. Their inclusion does not in any way constitute an endorsement by Teachers College, Columbia University, of their point of view.

Political cartoons can be a powerful way to teach and talk about public policy issues in the classroom. They engaging, often funny, and they teach very complex ideas in a quick and intuitive way. We are so convinced of the value of political cartoons that, in addition to including them in many of our blogs, we feature posts that are all cartoons.

Using cartoons presents an opportunity to teach students media literacy, including the ability to detect point of view or bias. As a sequence, we strongly encourage students to study the cartoon carefully, analyze the specific context of the cartoon, and determine the cartoonist’s point of view. See the blog post of October 8, 2013 for a guide to using the political cartoons we have selected. The Library of Congress also has a a very useful Cartoon Analysis Guide.

 

 

 

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Central Banks around the World

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February 23, 2015

Rather by accident, I found two interesting articles with information about central banks worldwide.

CB Map

The first, from UK Business Insider, has a great map showing who is easing and who is tightening monetary policy worldwide.  They point out that a “full 50% of the world’s population has seen monetary policy easing in 2015″ – and we’re only at the end of February!  Notice the absence of movement in the United States, which ties back to my previous post on Fed Chair Janet Yellen’s decision not to touch interest rates until at least June 2015.

Being able to analyze charts, graphs, and maps is a basic social studies skill for classroom use.  Have students analyze information off the map, and use the internet to research why these moves were taken and what potential results could be.

At the same time, a post in the Wall Street Journal looks at how some central banks are audited by governments around the world.  As we face Congressional pressure for legislative oversight of the Federal Reserve, it’s interesting to see what happens in other countries.  The article points out reviews of the Bank of England, the Reserve Bank of New Zealand, and the Sveriges Riksbank, the central bank of Sweden.

The difference becomes what such oversight means in different countries.  None of the reviews mentioned could require the central bank to turn over documents or meeting transcripts, something that Mr. Paul’s bill in the United States would require of the Federal Reserve.

Students could review the UFR overview lesson on the Federal Reserve, and use the news as a way to answer the question:  Who controls a central bank?

 

 

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Greece, revisited

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February 18, 2015

Princeton economist Paul Krugman has two recent blog posts comparing the current situation in Greece with the doomed Weimar Republic of inter-war Germany.  This could be a great example for students of how to bring UFR Lesson 4.3 on Weimar and Hyperinflation into the current day.

Krugman’s very interesting point in his first post comparing Greece to Weimar concentrates on a story that is often overlooked in inter-war Europe:  the attempt to force Germany to pay reparations for the Great War.  More specifically, he focuses on what those reparations would do to a new, fragile economy.  Krugman most definitely falls on a more liberal point on the spectrum than many of his colleagues, and he compares the reparations payments forced on Weimar Germany as similar to Greece continuing to pay on their massive debt to other countries.  It could, in effect, poison the relationships within the Eurozone.

In his second post comparing Greece to Weimar, Krugman offers a fascinating graph showing real GDP comparing the two countries.  In short, Greece actually falls below Weimar in terms of real GDP per capita over the troughs.

Krugman is not the only one making such comparisons between modern-day Greece and inter-war Germany.  The London Telegraph, the BBC, and the Financial Times have all written about it – but, they were looking at the Greece of 2-3 years ago.

This could be a great opportunity for students to dig deep into the Weimar lesson, and look to see what similarities and differences they can find in modern-day Greece.  What conclusion do they draw, and what evidence can they provide to back their opinion?

 

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Political Rhetoric

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February 13, 2015

I found a recent post by Princeton economist and NY Times blogger Paul Krugman a fascinating look at, essentially, political rhetoric.  Although Krugman’s focus is on individuals, most specifically Paul Ryan (R-WI), due to Ryan’s ties to the federal budget, it’s a terrific tie to UFR Lesson 2.5 on Rhetoric.

The essential dilemma for Lesson 2.5 is Is it convincing facts or effective rhetoric that determines what the public thinks about the debt and the deficit?  Krugman brings up the question – why do we judge politicians by how they come across in the mass media?

Have students read the blog post by Krugman and compare it to the lessons they learn in the UFR lesson on rhetoric.  How does Krugman define rhetoric in his blog post?  What examples does he give?  How does this relate to the federal budget?  What is the “personality cult” of Paul Ryan, and how does Krugman use it to make his point?

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Let’s talk about the Fed

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February 10, 2015

There has been a lot in the news lately about the Federal Reserve and interest rates – mostly about the fact that the Fed has stated they won’t touch interest rates until June at the earliest, and the desire by a growing number of Republicans and Libertarians to audit the Fed.

In late January, the Fed announced it could be patient with interest rates, and chose not to raise them at this time.  Citing potential stagnation of the economy and international developments (probably including events in Europe, Russia, and Greece), they will revisit interest rate changes in June.  The Washington Post pointed out that Janet Yellen, the Chair of the Federal Reserve, stated that “being patient” with rates meant at least two meetings, or about six months, before a decision to change the rate would occur.

On another front, Senator Rand Paul (R-KY) has stated his interest in legislation that would provide Congressional oversight of the Federal Reserve.  This idea is gaining interest from both Republicans and Libertarians.  Regional Federal Reserve Bank presidents and Fed Chair Yellen have stated their opposition to this proposal.  The New York Sun pointed out that in many ways, this suggestion would give powers back to Congress that were taken away with the formation of the Federal Reserve system.

Although not directly related to the federal debt or deficit, budgeting or policy priorities, the power (or potential power) of the Federal Reserve cannot be understated.  Use UFR Lesson 3.3, the overview of the Federal Reserve system, to give students background information, before encouraging them to research more information about the interest rate hike and/or the proposal for more Congressional oversight.   What stance do students take?  What evidence do they provide to back their opinion?

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Mankiw’s Rise of the Inequality Debate

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February 6, 2015

I found a post in Harvard Economist Greg Mankiw’s blog very interesting and to the point: he used the New York Times’ chronicle website to plot on a chart the use of “income inequality” and “inequality” in the news.  His query was simply this: why has the term “income inequality” only been popularized in the media for the last few years when economists have known since the 1990’s that it was a serious issue?

First of all, the use of the chronicle website on the NY Times site is a great way to show students what’s popular in the media (or at least in the Times) via graphical representation.  It’s also a strong tie to the UFR Mathematics lesson on models – can we use information in mathematical models to tell the same story in two different ways, both of which are true?  The skill of not only being able to read a graph with information, but more importantly, how to analyze that information and look for the “why”, is one that every students should have.

Second, the data itself offers valuable insight into income inequality discussions.  What is rhetoric?

 

 

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