Ian Davis 1 Ian Davis Malcolm Campbell English 1102 February 13, 2014

How does the market effect government spending and the national debt? The United States and her governors have battled for years over the debt. Both parties have battled to reduce the debt, but neither have been successful. Not only are neither successful but neither are willing to compromise, but there is another big player that determinesin if the debt will rise or fall. The economy plays a very large role of whether or not the debt will fluctuate. As many may know, the debt for the nation is significantly high. As of Looking at the last count, the debt is $17,344,649,888,998 ("List of Countries). Many people accuse the executive branch of the US government to be the blame for the trouble, but no one takes the time to examine the market and how it is doing[L1]. The market is the main contributor to the amount of money the government has, therefore it must do well. This was proven in WWII during the presidency of Franklin D. Roosevelt. When the stock market crashed prior to the war, people panicked, and the amount of debt the nation hadhave significantly increased. However, during the war the debt declined rapidly. This was due to the increase in production and sales in the US market to other countries. This could possibly happen again. According to Alfred Chandler, the most influential business historian in American History, in the latter half of the nineteenth century, the Modern Business Enterprise at that

Ian Davis 2 time began higher hiring foreigners to work for them due to the cheapness they would work for. He also pointed out that to solve future problems of the market, we must understand what is occurring in the business world, without attaching good or bad to the forces behind actions of businessmen (Gonzales, Andrae). How does this relate to the national debt though? It has to do with how much the economy makes, and in turn, how much of that money goes to the government to stimulate the economy. It is a complete cycle. However, it is not a completely perfect system. Since 1973, when Ronald Reagan was president, Reagans Reagonomics has caused the nation to be in debt to this day. According to the article History of the United States public debt, debt as a percentage of GDP has constantly increased since 1973, except during the presidencies of Jimmy Carter and Bill Clinton. While the debt still climbs and worries more and more people, there are ways that the economy can be stimulated to reduce and even diminish the national debt. Some past presidents have proven this to be possible. Franklin D. Roosevelt, Jimmy Carter, and Bill Clinton have all contributed to reducing the debt. President Barak Obama has also proven this possible. He has dropped the debt by 3.1 percentage points. That was recorded in 2012 by Politifact.com, a website sponsored by the Tampa Bay Times. Even though that this does not seem like much compared to Roosevelts presidency, he has fought against the right hand conservative party to reduce then debt for his first term of four years. His second term he has continued to reduce the debt. How is this so? According to CNN Money, president Obama used the money for the fiscal cliff in 2011, kept to the spending level set in place in 2010, and used the budget cut/ tax money made from the taxes of the economy.

Ian Davis 3 Still the debt grows. The two party battle still causes the stimulation of the economy to diminish. Currently republicans avoid to confrontconfrontation of the debt ceiling. According to The New York Times, the Republican Party is going to be once again the blame for the next crisis when it comes. So far the Democratic side is in the lead and has lifted the debt ceiling. This will provide breathing room in which more money, but not a lot, and be put into the economy so that the debt will reduce. As well as a debt ceiling lift, there have been recent breakthroughs in cannabis sciences that have proven to stimulate economic growth at the domestic level. Colorado, a recent contributor to the movement to legalization, has proven that the money made fromfor pot can help. With the state making slightly over two million dollars in the first month of its legalization, there is bound to be improvements in the amount made in future months and years. Currently the state is using most of the money to fund school expenses as well as funding for construction. The Colorado state government has passed laws that project an estimated seventy three million dollars, forty million of whichwhere forty million will go to more school construction (Brickworks Confident). As seen below, the growth of marijuana sales is estimated to give the government of Colorado six million a year, Iimagine if the entirety of the nation made those sales.

Ian Davis 4

All in all, the situation in which the government spending and debt limit is complicated and messed up due to the battles between the two political parties. In my own opinion, the debt ceiling is a terrible idea. In other countries where there is no debt ceiling, they are able to maintain constant spending and not remain in debt[L2]. I also believe that the tax relief programs that are given to the big businesses that receive them also cause the government to lose money which in turn provides no funds for keeping the debt down with national spending.

Ian Davis 5 Works Cited "Brickworks Confident About Forward Momentum." Sourceable Colorado to Fund School Construction Through Marijuana Tax Comments. N.p., 10 Nov. 2013. Web. 25 Mar. 2014. Gonzales, Andrae. "Outsourcing: Past, Presnt and Future." Washington.edu. Ed. David Dorwin, Diwaker Gupta, Kiran Kalyan, and Stuart Schimler. N.p., n.d. Web. 14 Feb. 2014. "List of Countries by External Debt." Wikipedia. Wikimedia Foundation, 24 Mar. 2014. Web. 25 Mar. 2014. Parker, Ashley, and Jonathan Weisman. "Obama's Record on Deficit Reduction." CNNMoney. Cable News Network, 09 Apr. 2013. Web. 13 Feb. 2014. Roos, Dave. "How Debt Works." HowStuffWorks. N.p., n.d. Web. 13 Feb. 2014. Sahadi, Jeanne. "Obama's Record on Deficit Reduction." CNNMoney. Cable News Network, 09 Apr. 2013. Web. 13 Feb. 2014. "United States Fiscal Cliff." Wikipedia. Wikimedia Foundation, 02 Nov. 2014. Web. 13 Feb. 2014.