Content Tagged: national

Senator Demint Writes about U.S. Role in Global Economy

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December 9, 2011

Jim Demint, writing for The Wall Street Journal, recently posted an opinion article discussing the current debt crisis in Europe and America’s involvement in helping them solve the problem. According to Demint, America has spent billions of taxpayers’ dollars in order to pull countries out of their debt. For example, nearly $40 billion was sent by America to the International Monetary Fund (IMF) to prevent Greece from fiscally collapsing. This move, however, “only delayed” the economic fallout from occurring. In Demint’s opinion, the United States must not focus on bailing out European countries from their outstanding debts, but look to solve the problems at home: “The most dangerous threat to the U.S. economy is not across the pond. It’s in the swampland of Washington, D.C.”

Demint states that the United States is near its fiscal tipping point. Other countries like Ireland and Portugal were bailed out when their debt-to-GDP ratios were much lower than what the United States is currently experiencing (74% and 94% respectively). With the raising of the debt ceiling in August, the United States now faces the predicament of having a 100% debt-to-GDP ratio. According to Demint, President Obama has built his political policies around European foundations, but if “the U.S. continues to mimic our European allies we’ll fall to pieces, too.”

As more European countries are reaching their fiscal tipping point, certain countries in the European Union (EU) are demanding stricter laws in order for bailouts to occur. However, the United States contributes the largest percentage to the IMF, yet has no voice in the EU. The United States has sent nearly $67 billion to the IMF this year according to Demint. In Demint’s opinion, America must end its era of sending billions of taxpayer’s money to the IMF and must focus on the economy at home. According to the article:

 

Members of the Obama administration must focus all of their efforts on strengthening the U.S. economy and balancing our budget, rather than on continuing to borrow from China to pay for Europe’s out-of-control debts.

Teachers can use this article to discuss the current financial crisis European countries are facing and how they are impacting the United States’ economy. Should the United States get involved in providing funds to help the debts of other countries? How does Europe influence the United States federal deficit? Do you agree with Demint’s opinion? Why or why not?

Teachers could also use this article to discuss perspective/bias within the piece. In what was does Demint express his political views? What are his goals and how does he present them? What might be some counterpoints to his arguments? How do his arguments address the issue of the deficit? These discussions could help students better understand the fiscal issues in Europe, how those issues influence the United States and the deficit, and the perspectives/biases found within media outlets.

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Comparing the Debt Crises of the United States and Europe

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December 4, 2010

National Public Radio’s All Things Considered recently featured Jacob Goldstein who compared the debt crises facing nations in Europe with that of the United States.  According to Goldstein, Europe faces a “big, immediate problem” because it is getting very expensive for those nations to borrow money.  He points out that the United States, however, can still borrow money relatively cheaply.

In his Planet Money blog, Goldstein argues that the willingness of other countries to loan the United States money at a low interest rate, “may be the most important distinction between the debt picture in the U.S. and Europe.”  He points out that Europe’s debt problems actually help the United States, because the U.S. is “still considered to be among the world’s safest investments.”

Yet, Goldstein warns that in the long run, one can find similarities between economic situations of the U.S. and Europe.  From the article:

As a percentage of each country’s overall economy, for example, the national debt of Portugal and Spain is comparable to the debt of the U.S…. And in the long term, the debt problem for governments in the U.S. and Europe will be driven in large part by demographics: More elderly people drawing on government retirement and health-care programs, and fewer working-age people to support them.

Teachers could use the graphs from the Planet Money blog in a lesson that compares the economy of the United States with those of several European nations.  Given the data provided in the article, students should be encouraged to hypothesize about the economic health of each nation and predict what future economic problems (if any) each nation is likely to face.  Students could then periodically check to see if the debt-to-GDP ratio for each nation is getting better or worse.

Students could be asked to find news reports from an assigned nation in order to see how much media attention their national debt receives.  Students could then compare this with coverage of the debt and deficit in the United States.  Through this analysis, students could focus on the following questions:  Which nation seems more concerned about the debt?  What stance are political leaders taking about the debt?  How is this stance similar to or different from political positions in the United States?  This comparative analysis will help students begin to understand how different countries respond to budget deficits and national debt.

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NBC Nightly News: Future $hock (Part 2)

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February 10, 2010

In part two of the NBC Nightly News with Brian Williams report “Future Shock”, Andrea Mitchell reports that China is America’s number one banker, holding $790 billion of US debt. This news report raises several interesting questions for students to consider, both about the national debt and the way that debt is portrayed in the media.

Teachers could use this news report as an introduction to a lesson about who holds US debt. Which foreign countries lend money to the United States? Is China the number one banker as the report suggests? Does this take into account money the United States “owes itself”? Should those debts be included when naming the “number one banker”?

Students should also consider the language and tone used in the news report. Is this report meant to inform, entertain, frighten, or persuade? When reporting on the Chinese economy, how do phrases like “when no one was looking” and “flexing their muscles” influence viewers’ understanding of the situation? Are these characterizations appropriate? These questions will help students begin to critically analyze news reports about the national debt.

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Balancing Budgets: From Reagan to Today

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In the Balancing Budgets: From Reagan to Today lesson, students will learn the concept of a balanced federal budget, and discuss how two different approaches,  a balanced budget amendment to the Constitution and a balanced budget act, address this concept.

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Budget Explorer

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Budget Explorer is an interactive online application that allows students to change the priority of U.S. federal budget and learn how to balance U.S. federal budget and reduce U.S. national debt.

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Budgetball

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Budgetball is a game that raises awareness about the issue of the national debt and encourage discussion and debate about America’s fiscal future.

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Debt Ski

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Debt Ski is an online video game that “spotlights the dangers of excessive debt, challenges young people to avoid destructive financial behavior, and spurs fiscally responsible action.”  It was developed by MTV’s college network, mtvU and the Peter G. Peterson Foundation.

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