ECON 369

Project Outline Ideas

Remember your project assignment:

You can do an individual paper or work in a group up to 3 people.  Your choice.

Some years ago a "super committee" was formed from members of both parties in order to come up with $1.2 trillion in cuts to the budget deficit -  over a 10 year period.  They were supposed to decide on both “spending cuts” and “revenue enhancements” - fancy phrase for tax revenue increases.  Of course, the debt has just increased since then.

So now we are going to form another committee and ....

You are now on the "super committee" - but you are to come up with $2 trillion in cuts over a 3 year period.  You need to decide how you are going to do this and then justify your decision.

So your paper should include:

1.  Your strategy and be specific.  If you are cutting from defense - say what/where you are cutting and WHY.  This also includes any assumptions you might make regarding behavior changes due to your changes.  For example - will increasing the income tax rate increase tax revenue?  Maybe, or maybe not -- so what are your assumptions regarding these kinds of strategies and make sure you back them up with good theory.  You can use both public choice theory and/or public finance theory.

2.  Your justification.  Justify each of your strategies - on both the spending side and the tax side.

3.  Who will benefit and who will lose (you can only talk about this in terms of money - not in terms of utility).

4.  What economic outcomes will take place due to your strategies?  Will more jobs be created?  Explain why.  Will businesses outsource more or less?  Explain why.  Etc.

The paper should be a maximum of 4-5 pages long (not including any graphs or other diagrams you might want to use) - longer papers will NOT be graded (typed, double-spaced using 12 point font) – there is no minimum length. 

Here is the cite to the budget - but you can use other sources as well.  Please make sure you cite any sources you use with appropriate information (including web page addresses).   USE EITHER THE 2015 BUDGET OR 2016 PROPOSED BUDGET NUMBERS (BE CLEAR WHICH ONE YOU ARE USING)

Due Date for the Super Committee Paper Assignment is Tuesday, April 22.  You will also have to tell the class the highlights of your paper that day.  So a short PowerPoint would probably be a good idea.

Here are some ideas to get you started with at least one cut and one revenue enhancement:

A.    Spending Cuts:

1.     Provide one example of something you think you are going to include in cuts.

2.     Provide a public choice justification for doing so.  Use a theory we discussed.

3.     Provide one beneficiary and one loser from your cut (and why they benefit or lose).

4.     Provide one economic outcome from your cut.  Be specific – I am looking for theory to be explained here.

B.    Revenue Enhancements:

1.     Provide one example of something you think you are going to include on the revenue side of the budget.

2.     Provide an economic justification for doing so.  Meaning – what is your economic theory regarding how revenue will be “enhanced” exactly (remember, rules-incentives-actions-outcomes).

3.     Provide one beneficiary and one loser from your “revenue enhancer” (and why they benefit or lose).

4.     Provide one economic outcome from your “revenue enhancer”.  Be specific – I am looking for theory here.