More on (im)Moral Budgeting

We have a budget debate going in the federal government and in state governments throughout the nation, and the decisions made have serious moral implications.

Republican rep. Paul Ryan has proposed a plan that would significantly cut social programs that millions of American families depend on while also lower taxes for the wealthy. The Obama administrations counter-proposal, however, still calls for only $1 in revenue increases for every $3 in spending decreases. So, even the "moderate" proposal at this point expects the lower and middle class to bear the burdens of deficit reduction.

In order to determine if this is a moral approach, everyone who reads this post should take a look at this interactive graph. The sliders allow you to look at which income groups have gained and lost over the last 100 years of economic growth. Take a look at how things have played out from 1988-2008 and from 1998-2008, and then consider the federal proposals for balancing the budget.

Rising prices and policy

A recent story on NPR discussed how prices are rising at a faster rate then wages. Consumers are seeing higher prices at the pump and the grocery store. Food and gasoline are two resources that people depend on, and most people don't have a choice to simply buy less. Middle-income families may have the option to spend less on things like recreation and entertainment. Lower-income families, on the other hand, really don't have much room to cut spending from their family budget. Rising oil prices are often discussed as a national problem, but the consequences will be most severe for people who are already struggling.

So what can we do about rising oil prices? Prices can rise for a variety of reasons, but fundamentally they rise because of either and increase in demand for oil or a decrease in supply. So we have two basic options, decrease demand for oil by using less of it or discover more oil. While discovering more oil may lower prices for the short-term, there is increasing evidence that extraction of oil will begin to decline within the next few decades.  So, increasing the supply will probably not be an option for long, in which case decreasing demand will have to occur whether we like it or not. The question become-- how do we want demand to decrease? Do we want to let the market take care of it and decrease demand by increasing prices, to the detriment of millions of poor families? Or, should we take a proactive approach and come up with methods for decreasing demand now?

What opportunities do you see for reducing demand before it's too late?