Obama Tax Plan Extends Bush Tax Cuts

In Obama's 2011 tax plan, the Bush Tax Cuts, originally implemented in 2001, will be extended due to pressure from the Republican party. In exchange, Obama will be able to elongate unemployment insurance for out of work Americans. The 2011 tax breaks and brackets are as such:

However, these tax rate extensions will only last two years. the new plan will include things like:
-lower social security payroll taxes, which will put more money back into your paycheck.
-extension of unemployment benefits for thirteen months
-small business owners will get capital equipment breaks
-capital gains and dividend taxes will stay the same boosting equities
-American Opportunity Credit will remain in place, giving tax breaks of up to $2,500 to college students and parents of college students
-teachers tax credit will be renewed for teachers who pay for supplies out of their own pocket
-child tax credit renewed of $1000 per child under 17 years of age


Overall, the tax plan sounds like it will be good. However the extension of the tax cuts allows the top percent of the population with the most income to pay very little in taxes when our country is full of people living in poverty. The tax money that these millionaires and billionaires could be paying would go to people who are struggling with the difficult economy. But at the same time I realize that compromising needed to be done in order to get some of the things that help people, like the unemployment extension, passed in congress.

The U.S. Economy

When discussing how well the U.S. economy is doing, one has to look at several different factors. To start with, the U.S.'s gross domestic product is currently at $14.119 trillion, making us the country with the highest GDP in the world. We have gone down only .250 trillion since 2008. Japan currently is second with $5.069 trillion, and China close behind with $4.985 trillion.

Then, we have to look at the unemployment rate. Currently 9.5% of the labor force is unemployed in the United States. From October of 2008 to February of 2009, the unemployment rate rose sharply from 6.1% to 9%. Since then the unemployment rate has stayed relatively the same, despite a spike to 10.6% in January of 2010. This unemployment rate is significantly higher than Japan and China, Japan having 4.9% and China having 4.2%.

Next there is the inflation rate. The U.S. has an inflation rate of 2.1% as of 2011. When compared to China's unfathomable 4.9%, and Japan's stellar 0%, the U.S. is average out of the top three countries.

Overall, the U.S. could be doing better in some areas, and worse in others. Our GDP and inflation rate are fair considering the recession we are in, while the unemployment rate clearly reflects that. The economy as a whole is doing fairly well for the country with the number one country economically in the world.

China Becomes World's Second Largest Economy

This Valentine's Day China officially became the world's second largest economy finally beating out Japan for the spot. China had been slowly climbing to the top for several years, so it was an inevitable thing that economists were not surprised about. China even has a faster growth rate than the U.S., which leaves people to question when it will take the top spot. China has been able to raise its economy to the top since its switch to a capitalist economy for a very simple reason. They have a cheap work force that makes lots of cheap goods. China is not a developed nation and therefore can pay their workforce far less than those of developed nations who also produce lots of products. Yet their rise due to this is what is slowly making them not be able to have this advantage. The more that China's economy develops, the more their middle lass grows and eventually the more they will have to pay their work force. Already companies are moving their factories to places like Indonesia and Cambodia form China because wages are lower. Eventually China will have to change from making things cheap for cheap to making more quality products that will cost more on the world market. As their economy becomes fully developed, they will no longer be able continue the way that they are now, because of the need to pay everyone more. Overall, China's ascent to number two will mean the slow of their steamroll, but will ultimately lead to more quality goods and services paired with the increased standard of living for the work force of China.

http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fg%2Fa%2F2011%2F03%2F03%2Finvestopedia51071.DTL

Republicans and President Near a Bush Tax Cuts Compromise

After lots of debate, the Democrats are nearing a compromise with the Republicans on the subject of the Bush tax cuts and whether they will stick or not. Many senior Democrats have admitted defeat over the issue and are dismayed by it. The number two Democrat in the Senate, senator Richard J. Durbin of Illinois was asked if the Bush tax cuts would be kept in place even for the wealthy, and he said "We’re moving in that direction, and we’re only moving there against my judgment." The Republicans have thrown out that they may agree to extend jobless aid for the long-term unemployed. Many Democrats are upset over the direction of this decision, given that they do not believe that the rich should continue to have tax cuts. However the White House is eager to reach a decision soon, even if that means compromising with the Republicans. The Democrats only have hope in that it will be a temporary extension, although the Republicans seek to extend as long as is possible.

I believe that the rich should not have tax cuts, because the country is so needing money in this time that to let the rich get away with this is unfair. However I do think that a decision does need to be made, even if that means the Democrats need to give in to the Republicans. If they move on quickly, then perhaps they can move on to other issues like focusing on the repeal of the "Don't Ask, Don't Tell" law.

http://www.nytimes.com/2010/12/06/us/politics/06cong.html?ref=democratic_party

California Midterm Election Governor Results

Jerry Brown is officially the next governor of California. He won this week's midterm election with 4,086,579 votes, totally around 53.5% of the votes. He beat Meg Whitman by 934,213 votes and 12.2%. Brown released a statement saying that he wants an end of the "polarization, hostility, and division" that has been in politics these past years. Because of the sweep of Republican wins all over the country, Brown promises that "I will be a frugal governor who will make hard decisions, who won't tax people without their approval." In response to her defeat, Meg Whitman said "It is now time for California to unite behind the common cause of turning around the state that we love...This election was much bigger than Gov. Brown or me ... our challenges are daunting, and they won't be solved by politics as usual. ... It is my hope that a new era of bipartisan problem solving can begin tonight...The journey is ending, but our mission is not. We did not achieve the victory we worked so hard for but if we all work together to demand change a new California will rise."

I am personally very pleased that Jerry Brown won the election. If I was old enough to vote, I would have voted for him, and my family voted him as well. I wanted a Democrat as the governor, because our previous governor was a Republican and he put us in this mess. Schwarzenegger was also a political outsider like Whitman, and I think it would have been unwise to put someone else who is inexperienced into office. Jerry Brown was governor thirty years ago when California was dealing with a similar financial crisis, and he helped pull the state out of it, so I have hope that he will have success again. I think that having a seasoned politician in office, who knows how politics in California work from personal experience will help because he'll know how to go around bureaucracy and what to look out for that can stand in his way.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/11/02/MNB91G53TG.DTL#ixzz14TC6xK51

Midterm Election Research

-Why are Republicans hopeful their party will gain Congressional seats during the
2010 midterm elections? What factors might disrupt these hopes for the Republicans?

Republicans are hopeful that they will gain senate seats because many Americans have grown restless with president Obama and the Democrats who promised change when they were elected. Their hopes are that people will want to vote Republican because after two years of the Democrats struggling to make change, the public does not see enough result to be appeased. In California at least, the Republicans may be at a disadvantage mainly because the candidate, Carly Fiorina, is a business woman and many people don't like the idea of a non-politician whose reputation from her former company is outsourcing jobs being the representative of the state.

http://www.mercurynews.com/breaking-news/ci_16486078?nclick_check=1

-Explain the reasons the Tea Party formed and what message this sends to both Republican and Democratic parties. What impact do you think the Tea Party will have on the 2010 midterm elections?

The Tea Party formed in 2008 after the economic crisis in response to the bailouts of big banks by the Bush and Obama administration. They are conservative and libertarian who are against big government spending, recent economic reform, and the recent health care bill. The message it sends to both the Republicans and the Democrats is that many people feel like they are not represented in government, and that many people believe that America needs to get back to its original principles. They want to make a statement that the people won't sit back and take what the government is doing if they don't agree with it, just like the Boston Tea Party when our founders protested in extreme ways because of things the government was doing that the people didn't agree with. The Tea Party will definitely have an impact on who is elected into office and how politicians present themselves in their campaigns for the upcoming midterm elections.

http://en.wikipedia.org/wiki/Tea_Party_movement

Latest Governor Polls

The latest polls of the two candidates for California's governor are now up. Republican candidate Meg Whitman has 44% and Democrat Jerry Brown has 50%. The other 2% said they would vote for someone else and another 4% are undecided. In the past weeks, Whitman has gone from 48% to 44%, many think is attributed to the illegal immigrant housekeeper scandal that occurred several weeks ago. In the beginning of the month, Jerry Brown had a 49% lead, and now his lead is increasing even more. In addition, his polls has raised since the beginning of the summer where he was at only 40% in the polls.

I was somewhat surprised when I saw the results of these latest polls. I understand that Whitman's polls have gone down due to her illegal worker scandal, but I also would have thought that Brown's polls would have gone down due to his "whore" calling scandal. I would have thought his polls would have gone down also especially since Whitman has been pushing his slip up to the extreme trying to get the female demographic enraged. But I can't say that I am unhappy with this, I think that Brown would be a better candidate because he has more experience and I trust his political view as opposed to an outsider who doesn't know what she is doing. Whitman presses so hard that her advantage is that she's an outsider, but the governor we have now was an outsider and how well did that work out for us?