BUS626 Week 3 - Discussion Forum 2 Responses Guided Response: In your response, take the opposing view of the original post regarding national debt. Respond to at least two of your fellow students’ and to your instructor’s posts in a substantive manner and provide information or concepts that they may not have considered. Each response should have a minimum of 100 words. Support your opposing view by using information from the week’s readings. You are encouraged to post your required replies earlier in the week to promote more meaningful and interactive discourse in this discussion forum.  Below are two classmates with discussion that need response. They are Lisa Schreiner and Jason Stack Lisa Schreiner A deficit is the gap when spending exceeds budget. A surplus is the gap when budget exceeds spending. The debt is an accumulation of deficits less surpluses over time. The large and increasing national debt is definitely an issue we should be concerned about. Persistent increases in debt could lead the US to a failed economy with low credit ratings from Moody’s, and a call on loans we cannot pay. During a recession, the deficit (debt overall) will increase as the US borrows funds to cover the spending gap. During an expansion, the US should decrease spending producing a surplus to lower the overall debt. In recent years, the economy has been running in expansion mode, but yet the government continues to spend, increasing the deficit and debt. This is not a sustainable practice. According to the Committee for a Responsible Federal Budget (2018), “Running large deficits when the economy is already strong means that any boost provided to the economy will be temporary, and may put unnecessary upward pressure on inflation and interest rates. Running permanent deficits means that they will increasingly hurt investment and growth over time. They cannot simply be waited out. Rising deficits are largely driven by the increasing cost of interest and health and retirement programs, which are caused by rising health care prices and an aging population. Yet even with these factors, deficits were on course to decline over the next couple years before Congress enacted fiscally irresponsible tax cuts and spending hikes” (para. 12-13). John Tamny views the national debt as a give and take, noting we are better off to have the government spending less with some debt than the government spending more and having no debt. John discusses limiting the government’s control on spending and investing into the private sector, generating technological advances and innovation to grow the economy (Tamny, 2020). After reviewing several articles and watching videos in the recommended reading section for the week, I agree, this is an issue and controlling government spending is part of the process. There are four programs consuming a significant portion of government spending: Social Security, Medicare, Medicaid, and ObamaCare. According to PragerU (2014), “to cut spendi.

1. BUS626 Week 3 - Discussion Forum 2
Responses
Guided Response: In your response, take the opposing view of
the original post regarding national debt. Respond to at least
two of your fellow students’ and to your instructor’s posts in a
substantive manner and provide information or concepts that
they may not have considered. Each response should have a
minimum of 100 words. Support your opposing view by using
information from the week’s readings. You are encouraged to
post your required replies earlier in the week to promote more
meaningful and interactive discourse in this discussion forum.
Below are two classmates with discussion that need response.
They are Lisa Schreiner and Jason Stack
Lisa Schreiner
A deficit is the gap when spending exceeds budget. A surplus is
the gap when budget exceeds spending. The debt is an
accumulation of deficits less surpluses over time. The large and
increasing national debt is definitely an issue we should be
concerned about. Persistent increases in debt could lead the US
to a failed economy with low credit ratings from Moody’s, and a
call on loans we cannot pay. During a recession, the deficit
(debt overall) will increase as the US borrows funds to cover
the spending gap. During an expansion, the US should decrease
spending producing a surplus to lower the overall debt. In
recent years, the economy has been running in expansion mode,
but yet the government continues to spend, increasing the
deficit and debt. This is not a sustainable practice. According to
the Committee for a Responsible Federal Budget (2018),
“Running large deficits when the economy is already strong

2. means that any boost provided to the economy will be
temporary, and may put unnecessary upward pressure on
inflation and interest rates. Running permanent deficits means
that they will increasingly hurt investment and growth over
time. They cannot simply be waited out. Rising deficits are
largely driven by the increasing cost of interest and health
and retirement programs, which are caused by rising health care
prices and an aging population. Yet even with these factors,
deficits were on course to decline over the next couple years
before Congress enacted fiscally irresponsible tax
cuts and spending hikes” (para. 12-13).
John Tamny views the national debt as a give and take, noting
we are better off to have the government spending less with
some debt than the government spending more and having no
debt. John discusses limiting the government’s control on
spending and investing into the private sector, generating
technological advances and innovation to grow the economy
(Tamny, 2020). After reviewing several articles and watching
videos in the recommended reading section for the week, I
agree, this is an issue and controlling government spending is
part of the process. There are four programs consuming a
significant portion of government spending: Social Security,
Medicare, Medicaid, and ObamaCare. According to PragerU
(2014), “to cut spending; specifically, cut the rate of growth of
the three legacy programs - Social Security, Medicare and
Medicaid. That doesn’t mean spending less money than we
already are. It simply means not increasing our spending as fast
as we have been” (para. 13). Updates to the retirement age have
been implemented over the years to try and close the gap on the
costs in these programs, but additional measures must be
derived. I believe further scrutiny is necessary on applications
submitted to receive benefits, particularly from folks whom
have not invested an extensive work history of contributions to
the system. The government should not be permitted to borrow
funds from these programs funded by the taxpayer for the
taxpayer.

3. References
Committee for a Responsible Federal Budget. (2018, December
13). The deficit has never been this high when the economy was
this strong. http://www.crfb.org/blogs/deficit-has-never-been-
high-when-economy-was-strong (Links to an external site.)
PragerU. (2014, September 29). How to solve America’s
spending problem. www.prageru.com/video/how-to-solve-
americas-spending-problem/ (Links to an external site.)
Tamny, J. (2020). Ashford University | BUS626 WEEK THREE
| DISCUSSION TWO Q&A
Jason Stack
Government Budget Deficits
I don’t think anyone one of us can disagree that the
national debt has been a highly debated topic for economists for
many decades. Impending doom and gloom is foretold of the
United States, and borrowing above it means to repay. As
Tamny (2015) suggests, Niall Ferguson and those alike have
predicted for years the downfall of the U.S. economy as a result
of its careless borrowing to a seemingly unfathomable debt
ceiling (pg. 29). Yet here we stand. The question remains,
should we be concerned about the national debt? Gwartney
suggests that we shouldn’t be concerned unless the interest rates
start rising, which increasingly compounds the repayment cost
(Gwartney et al., 2019, pg.12-7). Alternatively, Tamny 2015,
suggests that it’s the overall spending of the U.S government
regardless if the money is borrowed is collected (pg. 32). The
excess spending robs capital from the economy that the free
market could have invested back into itself. So, should we be
concerned about impending doom or not care at all? Like most
things in economics and life, there must be a balance.
I think the solution is found somewhere in between total
lockdown and going on an endless national shopping spree.

4. Even Gwartney et al. (2019) refers to what most of us would
consider a financial common sense, “live within your means”
(pg. 11-3c). I believe the same should apply to the United
States, as well as the individual. Even with the application of
John Tamny's logic, stating that the United States is a
seemingly riskless loan, there comes the point in time when
repayment becomes impossible no matter how great the interest
rate of the loans. For example, if my monthly income is 10,000
dollars, but I go out and incur 12,000 dollars of debt per month.
Even a zero percent interest rate, it would never be repaid
unless I increase my monthly income. Our country faces the
same issues with debt to income ratios, so either they raise
taxes, reduce spending, or borrow more money to solve the
problems. I believe the United States should live within its
means, that means we all tighten up the belt on government
spending.
Thanks,
Jason Stack
References
Gwartney, J. A., Stroup, R. L., Sobel, R. L., & Macpherson, D.
A. (2018). Macroeconomics:
Private and public choice (16th
ed.). https://www.cengage.com (Links to an external site.)
Tamny, J. (2015). Popular economics: What the Rolling Stones,
Downton Abbey, and LeBron
James can teach you about economics.
BUS626 Week 3 - Discussion Forum 1
Guided Response: Respond to at least two of your fellow
students’ and to your instructor’s posts in a substantive manner
and provide information or concepts that they may not have
considered. Each response should have a minimum of 100
words. Support your position by using information from the

5. week’s readings. You are encouraged to post your required
replies earlier in the week to promote more meaningful and
interactive discourse in this discussion forum.
Below are two of my classmates that need responses to their
discussions. They are Kristopher Wentworth and Tiffany
Gordon
Kristopher Wentworth
Fiscal policy in my own words is much like the knob on a sink,
it is the government's ability to adjust the amount of spending it
does and the tax rates. This is done in order to manipulate and
observe the nation's economy and to direct the national
economy a certain way. Now you might see this an effort in
futility like herding bees but it works, for the most part. In 1943
FDR utilized spending to bring the united states out of the great
impression but that was brought upon by the start of world war
2. What spending does is it helps boost the economy sort of like
getting a badly needed IV when you are dehydrated or sick. The
effect that this has on the U.S. economy is massive and there
are many examples throughout the 1900s to show how strong
the effect of fiscal policy is. like in 1997 there was a disparity
in the gross revenue and expenditures which lead to a surplus
that can then be reinvested and calculated throughout the
country. Overall I think it is an important feature of the
government that helps us with the economy and might be
inconvenient at times but allows us to bounce back.
Gwartney, J. A., Stroup, R. L., Sobel, R. L., & Macpherson, D.
A. (2018). Macroeconomics: Private and public choice (16th
ed.). https://www.cengage.com
Tiffany Gordon
Fiscal policy is used to talk about the spending and the taxes of
the government. The government has a budget just like we do as
individuals.

6. An advantage of fiscal policy is the rates of that which is
affected by unemployment. When the unemployment rate is high
the government can use this money to lower taxes. Another pro
would be taxing stuff that people shouldn't do such as having a
high tax on cigarettes and liquor. It is also beneficial to
individuals that need help such as food stamps and other
government services.
The cons of fiscal policy are that the government easily spends
more money then they should be and another con would be
raising taxes.
There are two types of fiscal policy expansionary and
contractionary . When it comes to expansionary is when the
government expands the money supply in the economy. What is
going on now would be a good example of expansionary policy.
The reason I say this is because the government has spread out
the money that they have to better provide for us Americans that
are in need. “An example of such an effort is the Economic
Stimulus Act of 2008, in which the government attempted
to boost the economy (Links to an external site.) by sending
taxpayers $600 or $1,200 depending on their marital status and
number of dependents” (Investopedia (Links to an external
site.)).The economy is in a bad situation right now and the
government is helping the economy by providing the stimulus
check to people.
References:
https://www.investopedia.com/ask/answers/040115/what-are-
some-examples-expansionary-fiscal-policy.asp (Links to an
external site.)
https://visionlaunch.com/pros-and-cons-of-fiscal-policy/ (Links
to an external site.)
Gwartney, J. A., Stroup, R. L., Sobel, R. L., & Macpherson, D.
A. (2018). Macroeconomics: Private and public choice (16th

7. ed.). Retrieved from https://www.cengage.com
BUS592 Week 3 - Discussion Forum 2 Response
Guided Response: Review the posts from your classmates and
respond to at least two. Compare and contrast the points you
and your classmates made regarding strategies for reducing risk
associated with foreign exchange fluctuations. Each response
should have a minimum of 100 words.
Below are two of my classmates that need response to their
discussion. They are Christopher Rich and Brett Beatty
Christopher Rich
While reviewing the information on John Deere's investor
relations, I was able to gather statistics and statements in order
to provide feedback in this discussion. Analyst would
potentially be able to utilize this information shared, and ask if
the company would be more profitable pulling out of some
economy's or markets. As an example Canada is a place where
they could possibly at least down size judging by the poor
performance that has been consistent for quite some time.
According to 1Q 2020 numbers their net sales are down by 10%,
which can partially be blamed on the Global pandemic at hand.
However, the foreign exchange transaction translation has
certainly decreased the profitability in the company currently.
The fluctuation of markets or the economy can affect the
currency and exchange rates, which again, did not help John
Deere in a positive manner, yet did so negatively. Given
different situations or circumstances, there is ways to offer
strategies to businesses in order to reduce risks in order to keep
from losing tons of profit. It may be possible to increase prices

8. somewhat to combat the fluctuation of foreign exchange
currencies. Also, if a company can swing it, use their own
modes of transportation to ship products where they need to be
shipped. Pull out of a market if the forecast isn't looking the
best is always on the table. Pricing things high yet within
reason when entering a new market can help the population
become used to that price/product in general, so when exchange
rates become unattractive, the price is still favoring the
company. John Deere is so far stretched across the globe it is
wise for the strategist to follow balance sheets and cut costs
elsewhere or make sure researchers are planning the best areas
to conduct business, with foreign currency transactions in
mind.
Brett Beatty
4:15pmApr 23 at 4:15pm
Manage Discussion Entry
Like all companies operating in the global economic market of
today, Deere & Co. has experienced both the benefits and the
drawbacks that occur when trading on an international scale.
One such drawback is loss of revenue due to exchange rates
(Block, Hirt, & Danielson, 2020). According to Deere & Co.’s
2019 Q2 financial statement, the firm saw a loss of $34.8
million directly attributable to foreign currency exchange. This
change would be characterized as the effect of exchange rate.
Moreover, such a significant loss is not the norm for the firm as
they saw a comparatively substantial gain in the same quarter
just one year prior.
One means of mitigating the risk that comes with exchanging
foreign currencies is deferring the exchange to avoid a poor
time to make the exchange for an opportunity to make the
exchange during a more favorable time. Additionally, during the
time prior to the exchange, the foreign currency could be
maintained in an interest bearing account so that it does not
remain stagnant (Block, Hirt, & Danielson, 2020).

9. As mentioned in the first paragraph, Deere & Co. is definitely
susceptible to having its bottom-line impacted by foreign
currency exchange rates. Accordingly, it is advantageous to the
firm that it is located in the United States. The US is a strong
currency that is not as prone to large fluctuations as other forms
of currency found internationally (Amadeo, 2019).
References:
Amadeo, K. (2019, December 13). Why the US Dollar Is the
Global Currency. Retrieved from
https://www.thebalance.com/world-currency-3305931
Block, S. B., Hirt, G. A., & Danielson, B. R.
(2019). Foundations of financial management (17th ed.).
Retrieved from https://www.vitalsource.com/ (Links to an
external site.)
John Deere. (n.d.). Investor relations (Links to an external
site.). Retrieved from https://investor.deere.com
BUS592 Week 3 - Discussion Forum 1 Response
Guided Response: Review the posts from your classmates and
respond to at least two. Compare and contrast the points you
and your classmates made regarding the role of working capital
in financial decision making and strategic planning. Each
response should have a minimum of 100 words.
Below are two of my classmates that need response to their
discussion. They are Nichole Mitchelland Iftear Naser
Nichole Mitchell
Working capital refers to how companies manage their current
assets, and it is important because current assets are always
changing. Current assets can help support a company’s growth,
but they are not always enough during times of rapid growth.
One aspect of working capital management is how companies
use current assets to finance growth. Regardless of the

10. company’s position or goals, it is important for its leaders to
know how much cash they have on hand so that they can make
informed, responsible decisions. Based on the company’s needs
and goals, leadership can use working capital management to
put assets to use and to determine if they should finance and
how (Block, et al., 2019).
John Deere 2018
Current Assets (in millions)
Cash and cash equivalents
$3,483.70
Marketable securities
$545.10
Receivables from unconsolidated affiliates
$34.10
Trade accounts and notes receivable
$7,519.30
Financing receivables - net
$25,870.30
Financing receivables securitized - net
$4,813.60
Other Receivables
$1,477.70
Equipment on operating leases - net
$7,039.90
Inventories
$7,160.90
Total Current Assets
$57,944.60
Current Liabilities (in millions)

11. Short-term borrowings
$11,761.80
Short-term securitization borrowings
$4,702.20
Payables to unconsolidated affiliates
$199.50
Accounts payable and accrued expenses
$9,625.80
Total Current Liabilities
$26,289.30
Net Working Capital
$31,655.30
Based on John Deere’s balance sheet for Q2 of 2019, they have
a significant amount of working capital at their disposal.
According to Block, et al. (2019), manufacturing can be
seasonal, so it makes sense that Deere keeps a fair amount of
cash on hand to cover slower periods. The financial summary
indicated that there is increasing uncertainty in the agriculture
industry that may cause sales to remain flat or slightly elevated.
For this reason, I would not expect a robust short-term
financing plan, as Deere is not likely to experience rapid
growth. It makes sense that current assets are greater than
current liabilities.
Short-term liabilities make up a little less than half of Deere’s
total liabilities. Because the financial summary expressed that
sales are only projected to increase by 5%, a large amount of
short-term financing may not be necessary. Long-term financing
may be attractive to Deere because it allows the company to pay
its debts over an extended period of time, however, rising
interest rates will increase the overall cost of financing and may
hurt the company in the long run.

12. References
Block, S. B., Hirt, G. A., & Danielson, B. R.
(2019). Foundations of financial management (17th ed.).
Retrieved from https://www.vitalsource.com/
John Deere. (n.d.). Investor relations (Links to an external
site.). Retrieved from https://investor.deere.com
Iftear Naser
Short term borrowings $11,761.80
Short term securitization borrowings $4,702.20
Payables to unconsolidated affiliates $199.50
Accounts payable and accrued expense $9,625.80
Long term borrowings $28,255.40
Total Liabilities
$60,791.30
Total Assets
$72,729.60
Working Capital
$11,938.30 ($72,729.60 - $60,791.30)
In order for Deere & Company to increase their profits they
need to minimize their liabilities. As it stands, they are yielding
a lower profit margin because of their high liability expense. If
they are able to minimize their short-term liabilities, they will
be able to increase their earnings in the near future and although
they do have high long term borrowings, they will have more
time to pay it back so it wont be as detrimental to their working
capital. Increasing interest rates would impact their long term
borrowings because this borrowed amount does not have the
liquidity as the short term borrowings as mentioned in the
liquidity premium theory (Block, Hirt, & Danielson. 2019). As a
result, they will owe more in the long run with their high long
term borrowings. Increasing interest rates in the short term will
also impact many of the decisions made by management because

13. this will affect the amount of working capital they have.
Resources
Block, S. B., Hirt, G. A., & Danielsen, B. R.
(2019). Foundations of financial management. New York: Irwin.
(17th ed.). Retrieved from https://www.vitalsource.com/ (Links
to an external site.)
John Deere. (n.d.). Investor relations (Links to an external
site.). Retrieved from https://investor.deere.com