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Fisher Ames, the Mire of Democracy (1805), in CAPCT, Vol.I, pp. 755-756
NameProfessorCourseDateNature of GovernmentsWeek 6-6Fisher Ames, the Mire of Democracy (1805), in CAPCT, Vol.I, pp. 755-756whydoes Ames thinkdemocraciesfail?Whatconditions are necessary, according to Ames, forpeople to be free?Why is itthathebelievesdemocracywill, veryrapidly, result in a loss of freedomforthepeople?According to fisher ames, democracy is a failand a letdown to thefreedom of thepeople in a number of ways. Heusesthecase of flattery to defineandexplain his reasons behind thisstand on democracy. Heusesthescenario of a manwhobelievesthat his intelligence, knowledge, andskillentertainandpleases his peopleonlybecausetheyfolloworpretend to agree with his policies. Fisher believesthatpeople will followorfallsfor an ideaorplaniftheythinkthey will benefit from suchadventures. By doingthis, theyflatterthepersonorleaderwhobelievesthattheyfollow him because; his ideas are fortheinterest of allpeople. Democracy is therule of themajoritywherethose with numbershave an advantage over those with fewernumbers. Fisher usesthisbasis of democracy to disputethatdemocracy is a form of freedom. Hebelievesthatthose with highnumbers may not havethegood will of everyone in society. Heconcludesthat is not onlydangerous to thefreedom of allbut can also be used as a tool of revenge against people with divergentopinions. Hearguesthatthemajority may takeadvantage of their numbers to settle a score with their enemiesorrivalsevenwhentheyknowthat their decision is not in thebestinterest of thepublic.Wrongleaders may land in powerjustbecausetheyenjoy a largefollowing. This may lead to embezzlement of publicfundsandotherpublicresources. Those in theseleadershippositions may alsousetheopportunity to sidelinethosewhodid not voteorselect them to thisleadershippositions. Thomas Jefferson, Letter to John Adams, October 28, 1813, in CAPCT, Vol. 1, pp. 742-743.This is Jefferson’s reply to Adams’ letter of September 2, 1813 (see above). Howdoesherespond to Adams’ criticism?In Thomas Jefferson’s responseletter, hecriticizes john Adams in a well-calculated manner without offendingorabusingthelater. Hedoes not criticizethepersonbut his opinionsorviews about aristocracy among men. Heagreesthataristocracyis practiced in thesociety, however, with theintroduction of gunpowder, thepoorandtheweakalso has a waydefending themselves from anyarm, which be inflicted on the them by therichandhigh in thesociety. Despite therichandthehighhavingaccess to othersophisticatedweapons, theintroduction of gunpowdergivestheweakandpoorsomesense of security in their lives. Forinstance, eventhepower can ownlicensedgunsorfirearmsforself-defensewhenfaced with anydanger in their lives. Hedisagrees with Adams on his view of aristocracy since hebelievesthatthenaturalaristocracy is themostpreciousgift of natureforinstructions, thegovernments, andthetrust of thesociety. Thisview on naturalaristocracy is divergent from that of Adams whodoes not believe in naturalaristocracy, butratherthemanmade from of aristocracywheretherichruleandthepoorserve. Theacknowledgesthefactthat their differencesare not based on personaldifferencesbutratherwellcalculatedopinionsandviews on thesamesubject. This is a professionalandethicalform of disagreementorcritic since at despite thedisagreementthese two are stillfriendsanddo not holdpersonalgrudges. In conclusion, Adams assuresthereadersthattheyjustexchanged their views on areaswheretheydiffer, andhehadnointention to causecontroversy whatsoever. He jokes thatboth of them are tooold to be willing to disruptthepeacefulcoexistence among thepeople. Week 5-7James Madison, A Candid State of Parties, in CAPCT, Vol.I, pp. 633-634Howdoes Madison characterizethedifference between the Federalist and Democratic-Republican parties? According to James Madison’s explanation, the three mainparties in America are based on differentideologies depending on differentfactors. Thesedifferences as discussed in thissection of theresearchwork. Italso highlights thefactors, which determinethenatureandthestructure of thesepoliticalparties. Thepoliticalpartiesincludethe federalist, democraticandtherepublicanparties. Thehistory of politicalparties in theunitedstates of America indicatesthatpoliticalparties in America wereformed based on two factors; ideologies of the British andthedesirefordemocracy by thepeople of theunitedstates of America. Those in support of theideologies of theunitedkingdomformedorare affiliated to a certainpartywhilethose with thedesire to realizethefullbenefits of thedemocracy of the American peoplealsobelongs to a rivalparty. Over a longtime, these two groupshavebeenlocked in thebattleforsupremacy, butthedemocratshavethenumbers unlike therepublicansonlyenjoysthefollowing of a fewpersons. The Republican Party is affiliated with thewealthyandtheelite in the United States of America whilethedemocratsare affiliated with themiddleclassandthepoor in the US. Thisexplainsthereason behind thelargepartyfollowers affiliated with thedemocratsandthefewfollowers affiliated with therepublicans. Theordinarypeople of the US believesthatthedemocratsshare in their grievanceshencethemassivesupportandfollowingtheyoffer to thepartywhiletherichbelievesthatthepolicies of therepublicans are for their benefitshence their support to theparty.Thisimpliesthattherepublicans’ party consists of thehighandpowerful in thesocietymakingiteasyfor them to manipulateorinfluencethesystem. Thomas Jefferson Notes on the State of Virginia, Query 18-19, in CAPCT, Vol. I, pp. 354-355According to Jefferson, why is agriculturebetter than manufacturing? Why is slaverybad, in Jefferson’s judgment? Isslaveryworsefortheslave, orforthe slave-owner?In thisreading, Jefferson talks about three mainissues;agriculture, manufacturing, andslavery. Hebelievesthatagriculture is better than manufacturing; healsogives out his reasons against slaveryandpoints out thedangers of slaveryandtheparties negatively affected by thispractice. Jefferson’s arguesthatforeign European policiesare imposed on the American people without muchthought of consideration on thereasonsfor their practice in the European countries. Heusesthecase of manufacturingindustries in America; according to European countriesdo not havefertilelandforcultivationthisleaves them with theoption of manufacturing. This is not thesamecase in America, which possessesplenty of fertilelandforagriculturalpurposes; however, thisdoes not happendue to theinfluence of foreignpolicies in America. Jefferson believesthatthe European practicesmanufacturing as a necessityrather than an option since theydo not havefertileland to supportagriculturalactivities. On slavery, heuses biblical point of view to stand against its practice. Hearguesthatslavery is against libertyandequality as stipulated in the Christian doctrine. Hearguesthatit is unfairagreement, which ought to abolish in the United States. Jefferson aloarguesthatslavery is dangerous to masters since theslaves may revolt against their masterskilling them orphysicallyharming them in theprocess. This may not onlyaffectthepeacefulcoexistence of thesocietybut may sabotagetheeconomy of theunitedstates of America since themastersonly rely on thelaborprovided by slavesforproductionpurposes.It is from thispoint of viewthat Jefferson disagrees with thisinhumanpractice. Week 4Alexander Hamilton, Federalist No. 7, in CAPCT, Vol. I, pp. 456-458What is Hamilton afraid might happen to the United States in thefutureiftheproposedfederalconstitutionis not ratified? Thisessay is an implicitcriticism of the Articles of Confederation. Whatdoes Hamilton imply is wrong with the Articles? Isthiscriticismfair?According to Hamilton, thepeaceandeconomicdevelopment of thefuture of the United States of America greatly depends on theratification of theproposedfederallaws. Hamilton bases his critics on thearticles of confederation, which he terms as dangerous to theconstitution of the United States of America andthepeacefulcoexistence among thestates in the US.Thisarticletalk about amendments, which to be made in order to maintainpeace in the United States. However, despite thesechangesorappointments, chaos is likely to break out in the United States of America. itresult from thepossibilitythatthechangesortheappointments may favorsomestates at theexpense of others. Since thechangesrevolve around fundingthegovernment, states, which feelthattheyare burdened by the allocation orcontributionrequirements, may withhold their contributions from thetreasury. This may result in bitterness among thestates since theoncewhocontribute may decide not to dothesame in futurerequirements. It may alsolead to economic lockdown andcollapse of the American economy. Anyevent that negatively affectstheeconomy of America alsoaffectstheservicesthatthegovernmentoffers to its people. Forinstance, hospitals, policestations, civilservicesectors, andpublicoffices among otherorganizationsowned by thegovernmentwill be closed down blockingpeople from accessingsuchservices. Closure of thehospital may lead to unnecessaryloss of liveandthespreadandoutbreak of contagiousdiseases.
Differences among states in the US may alsolead to civilunrestorcivilwars, anddestruction of properties among othernegativeconsequences. America may also be vulnerable to terrorattacks during suchstates of lawlessnessandcivilunrest. Thisimpliesthatthepeaceandeconomicdevelopment of thefuture of the United States of America greatly depends on theratification of theproposedfederallaws.James Wilson, Speech on Ratification (1787), in CAPCT, Vol. 1, pp. 521-522Why, according to Wilson, is a Bill of Rights unnecessaryfortheproposedfederalconstitution?In his speech after beingelected to representthepeople, James Wilson, thankedthepeopleandassured them thathe will at alltimesrepresent their needs in thehouse of congress. Healsoexpresses his stand on theomission of thebill of rights in theproposedconstitution of the United States of America. Manypeople, leadersandthecitizens of the US feltthattheomission of thebill of rights in theproposed US constitutionwas catastrophic to thefreedomanddemocracy of thepeople of America. Theythoughtthatomittingthebill of right in theproposedconstitution would meanthatthegovernment would abuserights of thepeople. James Wilson did not sharethesameopinionconcerningthismatter since hebelievedthatthebill of rightsis stated in theconstitutions of thestates of the US. He supports his arguments by statingthattheconstitution of thestates, which makes up the US, outlinesthebill of rightswhiletheproposedconstitutionpreservesthesamebill of rights. Thisimpliesthateven with theomission of thebill of rights in theproposedconstitution, theconstitution of thestatesstillcontainsthebills of rights. Thismakesit redundant fortheproposedconstitution to havethesamebill of rights since itis charged with preservingtherights of thepeople of America.Week 3Samuel Adams, “Circular Letter” in CAPCT, Vol.I, pp. 197-199According to Adams, what is theproperrelationship between Parliament andthelegislatures of thevariouscolonies?Why is itinappropriatefor Parliament to taxthepeople of thecolonies?In manygovernmentstructures, thelegislatureandparliament is thesamebranch of thegovernmentcharged with themandate of makingthelawsandtherules of theland. In thesetting of the United Kingdom and its colonies, this is not thecase since parliament is thesupremelegislativebranch of thegovernmentrepresentingallthecolonieswhilethelegislatures are branches of thecolonykingdomoperating within thecolonies. Thisimpliesthatparliamentpossessmorepower than thelegislatures since itrepresentsthewholekingdom unlike thelegislatures, which onlyrepresentthecolonies. Parliamentdrawsitlegislativepowers from theconstitution. Thisimpliesthatgoing against theconstitution by theparliament may lead to its downfall. Theconstitution is thestrongestdocumentanykingdom, country, states, ororganizationallthepowers of anygovernmentare drawn from theconstitution.People from thecoloniespaytax to theparliament, according to Adams; this is inappropriatedue to thereasonsdiscussed in thissection of theresearchpaper. People from thecoloniesare not represented in theparliamentthismakesitinappropriatefortheparliament to taxpeople from thecolonies. By taxingthesepeople, parliamentviolates their sovereignty as thepeople of thecolonies.Theissuesaffectingpeople from thecoloniescannot be solved by the England’s parliament since theyneedlocalsolutionthismakesitunconstitutionalfortheparliament to tax them.Theparliament of England does not haveanyinterest in helpingthelocalpeople from her colonies; theyonlywant to solicitrevenue from them for its selfishambitions. Thisalsomakesitunconstitutionalfor them to collecttaxes from thelocalpeople from their colonies. John Adams, Clarendon, No. 3 (January 27, 1766), in CAPCT, Vol. 1, pp. 182-185Howdoes Adams describethe British Constitution? Doeshethinkthe British Constitution extends to thecolonies? Whydoeshethinkthe British Constitution is soadmirable?According to Adam’s description, the British constitution is thebestconstitutionanyleadership can offer to its people. Hecomparestheconstitution of British to thestate of nature. Thisimpliesthathebelievesthat with the British constitution, one is compelled to dogood from his or her innerspiritrather than theoutsidefactors.Hedefinesthe British constitution as a limitedmonarchyor a combination of three forms of governments. Thesebranches of thegovernmentare divided into legislation, the king/queen, the commons, andthecitizens. Thepowers of theconstitutionare divided into legislativepowerandtheexecutivepower. Thelegislativepowerslie with theparliamentwhosemainfunction is to amendandcreatethelaws. Parliamentdraws its powers from theconstitution of the United Kingdom. Anyattempt to act above thepowersgiven to it by theparliament may leaddissolution of theparliament. Theexecutive is thesecondmostpowerfulbranch of thegovernment; italsodraws its powers from theconstitution. Since thiskingdomis not ruled by thepresidentialsystem, theexecutivepowerslie with thepremier. The premier is alsothehead of theadministrationwhilethequeen of England is thehead of state. Adams admires thisconstitution since thebiggestportion of powerlies with thecitizenswhoelect their preferredleaders. Theyalsohavethepower to pass a vote of noconfidence against anyleaderwhodoes not represent their interest in their respectiveleadershippositions. It is thepowerbestowed on thepeople, which makethisconstitutionadmirable. Noorganorbranch of thegovernment has morepower than theotherdoes in thesettings of thisconstitution. Thisensuresthatallthebranches of thegovernmentkeeps a check of one another at alltimes. Forinstance, thelegislativekeepstheexecutive on thecheckandvice versa.
Fiscal Policy, BCs Action Plan
RUNNING HEAD: FISCAL POLICY
BC’s Action Plan
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31st March, 2011
Introduction
Fiscal policy refers to the use of taxes, transfers by the government or the purchases of goods as well as services in order to get a shift in the aggregate demand curve. They include expansionary fiscal policy which increases the aggregate demand and closes the gap caused by recession and the contractionary fiscal policy which decreases the aggregate demand and eliminates gaps caused by inflation.
Fiscal Policy, Taxes, Transfers and Economy
After the identification of the recessionary or inflationary gaps a government is required to develop and implement an action plan; processes that take time. The fiscal policy in a particular country economy has a multiplier effect where the expansionary fiscal policy increases the GDP while the contractionary has a converse effect on GDP. There is a larger multiplier on changes resulting from purchases by the government than those in taxes or transfers since part of the latter is absorbed by savings. Therefore a more powerful effect on the economy is created by changes in purchases by the government than similar changes in taxes and transfers. The size of the multiplier and the size of business cycle fluctuations can be reduced by some rules that govern taxes and transfers which act as automatic stabilizers. With relation to budget balance, discretionary expansionary fiscal policies cause a decrease by making budget surplus smaller or a bigger budget deficit while on the converse contractionary fiscal policies result in an increase that is a bigger budget surplus or a smaller budget deficit. For example, an increase in government purchases of goods and services, higher government transfers or lowered taxes for the former and vice versa for the latter (Krugman, Wells and Myatt, 2006).
Due to the effects of that the business cycle has on budget balance fluctuations, there is need for the government to make an estimate on the budget balance that is cyclically adjusted so as to separate them from those caused by the discretionary fiscal policy. The budget balance rises and moves towards deficit during recessions while it falls and moves towards its surplus throughout expansions.
Since the accounting of government budget is calculated based on fiscal years deficits have long term effects as they increase public debt. Rising government debt may cause a big problem since they crowd out investment spending which cause a reduction in the long term economic growth. It also may lead to government default causing turmoil in both the economy and finance.
Fiscal health can be measured by the ratio of debt to GDP. Although implicit liabilities may not be part of the normal debt statistics, they are a debt effectively because they are the government made spending promises.
Action Plan in BC
In British Columbia for example the government is aiming at reducing tax, supporting those who earn low income and protecting the people’s savings as a result of slowdown in the economy. This will be done through deferment of property tax payments for home owners with at least 15 % equity with another plan coming up for families that have children under the age of 18. This will include applied simple interest with non repayment of the deferred taxes till the homes are sold (British Columbia, 2010).
There are also low income taxes with low income earners not paying any income taxes at all. Some of them pay less with a decrease between 37 percent and 70 percent. In addition, tax credit of $105 and $31.50 are given to adults and children of low income earners respectively as support. For individuals earning of less than $20,000 credit of $ 230 will be offered. Other services will include new pension, additional options for seniors, savings security by insurance companies, rental help provided for seniors, small business and corporate income tax relief and rebate on industry tax (British Columbia, 2010).
References
British Columbia. (2010). B.C.’s Economic Plan to Support Families, Workers and Boost Productivity. Retrieved March 31, 2011, from British Columbia: http://www.gov.bc.ca/economic_plan/index.html
Krugman, P., Wells, R., & Myatt, A. (2006). Macroeconomics. New York: Worth.
Fiscal policy entails controlling government spending and tax regime by a central government.
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Fiscal Policy
Introduction
Fiscal policy entails controlling government spending and tax regime by a central government. This is utilized in stabilization of business cycles, reduction of unemployment and inflation, and encouraging economic growth. In the US, fiscal policy is principally implemented at the federal level via acts of Congress as well as presidential actions. However, local governments and state also implement fiscal policies to stabilize their domestic local macro-economies. In the government sector, there are three optional tools in the employment of fiscal policy. These tools are government procurement, transfer payments, and taxation. A substitute to fiscal policy is the monetary policy. The fiscal policy is founded on the assumption that aggregate expenditures, particularly business investment, are the key sources of business-cycle volatility. The means of rectifying this instability is as a result realized via aggregate expenditures. The objective of fiscal policy is to influence aggregate expenditures, and consequently the macro-economy, directly through government procurement or indirectly through taxation and transfer payments.
US FISCAL POLICY
In regard to the U.S. fiscal policy, the sluggish pace of economic recovery and fragile job creation, in spite of the broad margin of surplus capacity, argues for sustaining supportive fiscal and monetary policies in the near term. In reality, the expansionary fiscal policy played a vital role in forestalling a deeper recession in the U.S. In reference to IMF analysis, the fiscal measures contribution to GDP growth was approximately 2% points in 2009 and an additional one percentage point in 2010. In the same period, the public held federal debt rose from approximately 36% of GDP in 2007 to approximately 62% of GDP in 2010. In the absence of remedial measures, and considering fundamental fiscal pressures predating the predicament, debt might reach approximately 95% of GDP by 2020. In the absence of policy adjustments, consequently the debt would continue rising (Bureau of Economic Analysis, News Release, 1/27/12). It is in this perspective that, the necessity for urgent measures to secure medium-range fiscal sustainability appear to be patently obvious.
Current GDP Growth in the US Economy. According to the Bureau of Economic Analysis (BEA) advance estimate, the real GDP, meaning the output of services and goods produced by property and labor in the US, increased at a yearly rate of 2.8% in the last quarter of 2011. In the third quarter, the real GDP had increased 1.8%. Increase in real GDP in the last quarter of 2011 depicted positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, nonresidential fixed investment, and residential fixed investment that were partially counterbalanced by negative contributions from spending by the federal government, local government, and state (Congressional Budget Office, 3/2011).
Current State of Inflation in the US Economy. Inflation is not likely to be a major predicament in the US economy. Inflation has risen considerably in 2011, but there is a strong likelihood that the trend is improbable to persist. In 2010, the US economy experienced remarkably low inflation, but in the previous 6 months, it experienced an inflation rate of over 2%. There are three elements of foundational inflation that have imbalanced the rate of inflation to be greater than the Federal Reserve Bank’s long-range target. These elements include rent, automobiles, and the prices of apparels (Bureau of Economic Analysis, News Release, 1/27/12).
Current State of Job Creation in the US Economy. The U.S. Bureau of Labor Statistics alleges that, payroll employment in the nonfarm sector rose by approximately 200,000 in December 2011, and the rate of unemployment continued trending down at 8.5%. There have been some job gains in warehousing and transportation, retail trade, health care, mining, and manufacturing. For almost a year, the US economy has consistently experienced higher net new job creation rates than in the initial two years following the global economic recession. However, the current job creation rate is still at 50 of the +26 score found, when the country was technically in a depression (Alex Adrianson, NYT, 9/16/10).
The Existing Budget Situation. The US is currently experiencing deep economic and budgetary challenges. In contrast to the President’s budget estimates, the Congressional Budget Office (CBO) baseline estimates largely mirror the postulation that current taxation and spending laws would remain unaffected. Under that supposition, CBO anticipates that, for the 2012 to 2021 period, there would be a cumulative deficit in the economy totaling to $6.7 trillion. CBO’s estimates depict that, in 2012, the deficit in the President’s budget may decline to a total of $1.2 trillion, or 7.4% of GDP. That deficit is $83 billion larger than the deficit anticipated by CBO for 2012 in its present baseline. The deficits in subsequent years in regard to the President’s proposals may be lesser than the 2012 deficit, even though they may still add considerably to the federal debt. The deficit may to 4.1% of GDP by the year 2015, but enlarge in subsequent years, reaching 4.9% of GDP in the year 2021(Bureau of Economic Analysis, News Release, 21/1/12).
Having come out from the recession, the President proposed a plan to restructure the economy. The 2012 Budget seeks to cut wasteful expenditure, while maintaining the investments requisite for job creation and economic growth. The budget targets limited federal resources, and proposes reforms how the government conducts its business. The fundamental facts in the budget include the following.
The Budget comprise above $1 trillion in reduction of deficit. Approximately 70% from cuts.
Non-security flexible expenditure freeze for five years would decrease the deficit by approximately $400 billion in the coming decade. (Congressional Budget Office, 3/2011).
Appropriate Fiscal Policies for the US Economy. The best fiscal policies for the US economy should address cuts to defense, entitlement, and domestic programs. Every one of the spending cuts would be suitable even if the government would be running deficits. Numerous federal programs diminish individual liberty and lead to economic distortions. In the event that these programs are cut, resources will flow from government related activities of low-return to private sector initiatives of higher-return. This section will illustrate how reductions in spending would eradicate the deficit of the federal budget over 10 years. It explains revenue and spending projections as a share of GDP in accordance with the 2011 Congressional Budget Office projections (Bureau of Economic Analysis, News Release, 1/27/12).The projections in relation to revenues presume the extension of substitute minimum tax reprieve and revoking of the tax increase in the health care law of 2010. The projections for expenditure change the CBO baseline to embrace more pragmatic postulations in regard to troop reduction abroad, and Medicare extension.
In Figure 1 below, the bottom line illustrates that with tax relief, federal revenues are projected to increase to 18.0% of GDP by the year 2021. This is as the economy recuperates and takes up again regular growth. The line at the top illustrates President Obama’s projected spending in regard to his 2012 fiscal budget. Spending, as a component of the GDP, is projected to plunge the coming few years as financial support from the stimulus bill of 2009 dwindles out and expenditure on war plummets, but spending is estimated to begin rising again subsequently. The high spending course would bring about higher debt, higher taxes, or both.
(Bureau of Economic Analysis, News Release, 1/27/12).
The line in the middle of the chart illustrates spending in the balanced budget draft. In this draft, expenditure cuts of above $1 trillion yearly by 2021 will be phased in approximately ten years. The cuts will create substantial savings in interest by 2021, and overall federal expenditure would plunge to 18.0% of GDP. This depicts an equivalent level in comparison to the federal revenues in 2021. With these cuts in place, the federal public debt would climax at 75% of GDP in 2013 and subsequently plunge to 64% of GDP by the year 2021.
The US should increase taxation in order to afford additional public goods, as is the case in Scandinavian countries. The tax revenues in the US are among the lowest, whereas it has one of the highest spending in government. This scenario depicts the budget predicament in the US economy. This anomaly must be corrected.
CONCLUSIONOfficial estimates show that, in the absence of reforms, federal expenditure will rise to above 40% of GDP by the year 2050 and higher subsequently. Local and state spending surpasses that, and consequently, the government would use more than 50% of the whole U.S. economy. Policymakers should institute the set of cuts presented in this paper, and subsequently pursue supplementary reforms including restructuring of Medicare.
Works Cited
Alex Adrianson. “Spending Cuts Are Good For the Economy”, The New York Times, 16 Sept 2010. Web. 31 Jan.2012.
Bureau of Economic Analysis. “News Release”, US Department of Commerce. 27 Jan. 2012. Web. 31 Jan. 2012.
Congressional Budget Office.”Preliminary Analysis of the President’s Budget for 2012”, Congressional Budget Office, March 2011. Web.31 Jan. 2012.