The first topic discussed during the debate was the creation of jobs and the reduction of unemployment in America. Romney only talked about enhancement of the scholarship program in order to enable students to attain higher education. Obama advocated for a strategy to give incentives to companies that invest in the United States. Changing the energy situation by developing renewable energy and reducing the budget’s deficit are other efforts suggested to be fulfilled by Obama in advancing the state of employment and the economy.
Different aspects such as the tax regime, state of importation and exportation, and government expenditure influence the state of the economy in terms of surplus or deficit. The government should be actively involved in managing this balance because it affects the ability of the economy to create jobs and further develop its perspectives. The strategies supported by both candidates seem to point towards a progressive tax regime, which places a heavier tax burden on people in the high income groups. The government has to protect low and middle income earners from heavy taxes to avoid affecting their consumption negatively. By keeping the tax rates for 98% of all households and small businesses constant and raising the tax for the top 2%, the economy can grow because this increases tax revenue. This enhances a balance in the budget and protects the purchasing power of most citizens. Tax credits and deductions can be used for the benefit of specific parts of the population such as college schooling and mortgages, among others.
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Intervention of the government is a significant aspect of any economy, but some people feel that the market has sufficient capability to control itself. This idea lies in the permission for the market to operate without intervention based on the forces of demand and supply. The self-regulation mechanism may be incapable of ensuring continued growth. Consequently, it can result in market failure due to lack of controls and safeguards. The debate revealed an intention to increase government intervention in the economy through the different safeguards and policies. The free market strategies applied by companies enable them to move their production in order to improve their profits. Although this is beneficial to them, it results in many jobs being exported from the United States to other countries such as China (Wright, 2009).
Laissez faire economics and free market mechanisms are based on ideal competitive models that focus on the free flow of information and revealed preferences. Nonetheless, when companies can limit competition or fix prices, they impede others from entering the market. It means that consumers are unable to select the best sellers or manufacturers, and the government has to intervene by putting appropriate guidelines to correct the market and ensure fair trade. Government intervention is essential in preventing financial crises, loss of production and employment opportunities. Deficit financing shows that these interventions have to be safeguarded to prevent anomalies from generating into financial and social crises. This highlights the need for control of these strategies in order to ensure that they do not stifle innovation or reduce the level of disposable income for the public, but governments had to intervene in financial and other institutions in order to prevent them from failing. Irrespective of the taken position, government intervention is necessary. It is crucial to determine the cause of failure in order to prevent inefficiencies that may arise from intervention. Some important steps should be taken in the implementation of these interventions to ensure that they do not wreck the economy as opposed to enabling it for the sake of recovery (Aikins, 2009).
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