The objective of every economy in the world is to achieve economic justice at all cost. Economic justice refers to the acts of creating economic policies whose ultimate objective is creating equal economic opportunities for every person affected by the economy (Konczal & Mason, 2017). The government through the monetary institutions such as the central banks focus on instituting monetary policies that help to bring about social justice in the country. In addition, governments advance taxation rates that foster economic growth (Konczal & Mason, 2017). However, ensuring that economic growth is sustainable and beneficial to the people is the most important thing in the field of economy. The government achieves economic stability and success through …show more content…
Government expenditure and taxation, as well as debts, are of great national importance as far as the economic growth is concerned. The collection of taxes has so much to do with the economic growth of the country (Konczal & Mason, 2017). With revenues from the taxes, the government provides a whole lot of services that require proper funding to be a success. The United States government has expressed the desire to reduce the taxes to increase the disposable income to its working class and steer economic growth. The government has considered tax cut as a strategic move to achieve economic justice. By reducing taxes and expenditure, the government directly influences the overall shape of the economy. The government budget is slashed significantly, and provision of certain services to the public will be difficult. Also, the government may not be in a position to invest in projects that create employment opportunities and boost investment (European Bank, 2016). For example, investment infrastructure is affected thereby affecting how people do business. The fiscal policy affects the demand, wealth distribution, as well as the capacity of the economy to produce goods and services necessary for economic growth. Therefore, any changes in taxation will have strong impacts on the demand for goods and …show more content…
Therefore, tax cut as a fiscal measure may only have short-term benefits whose overall results will be a burden to the entire nation (European Bank, 2016). When the public debt increases, the government will be forced to increase the taxes higher than they would have been a normal tax rate increment. Therefore, the taxation cut has only short benefits as far as the economic justice is concerned. For economic justice to be sustained, the government must ensure that the tax cut policy is sustainable. However, the unsustainable tax cut is a disaster for the economy in the long run. For the consumers, lowering the taxation rate, when other factors are constant, increases the disposable income significantly. An increase in net income increases the consumer spending as well as investment, which on aggregate steers the economic growth (Konczal & Mason, 2017). If consumer spending increases across the nation, it is obvious that economy will grow. High taxes means that other than the reduction in consumer spending, savings and investment are also low factors that can affect the economic life of the people
In “What Do We Deserve?”, Arora takes a look at political philosophies and asks an important question, “How much of my good life do I really deserve?.” He brings up that argument that the contest of life is “rigged from the start” (Arora). How do one fix the contest so it's fair for everyone? Society can start by leveling the playing field to give everyone an equal chance, eliminating the idea of winner vs. loser, and encouraging and rewarding hard work and natural talents. Once the system is repaired, then we will see that those who make the effort and take advantage of their own gifts will succeed and be truly deserving of their earnings.
Economic Injustice in America "Class is for European democracies or something else--it isn't for the United States of America. We are not going to be divided by class." -George Bush, the forty-first President of the United States (Kalra 1) The United States of America was founded on the basis of a "classless society of equals," committed to eliminating the past injustices imposed on them by Great Britain.
How does the general economy affect government budgets? What is the role of government in helping the economy grow?
government’s ability to hold true to its true purpose, which is to establish a government
The reduction of government role in the economy will affect fiscal policy by decreasing deficit spending a...
The use of taxes is one of the government's favorite ways to make its presence known in the economy. While this method seems blatantly obvious, many of the ways the government uses the money collected by taxation is not. Some of the money it takes is used to fund other programs designed to "protect" consumers and to "create" jobs. Be...
Everyone has their own political leaning and that leaning comes from one’s opinion about the Government. Peoples’ opinions are formed by what the parties say they will and will not do, the amounts they want spend and what they want to save. In macroeconomic terms, what the government spends is known as fiscal policy. Fiscal policy is the use of taxation and government spending for the purposes of stimulating or slowing down growth in an economy. Fiscal policy can be used for expansionary reasons, which is aimed at growing the economy and increasing employment, or contractionary which is intended to slow the growth of an economy. Expansionary fiscal policy features increased government spending and decreases in the tax rates as where contractionary policy focuses on lowering government spending and increasing tax rates. It must be understood that fiscal policy is meant to help the economy, although some negative results may arise.
In time of economic crisis the government has a choice to cut spending or increase spending for public goods and services. “In 2009, Congress passed the American Recovery and Rein- vestment Act, which authorized $787 billion in spending to promote job growth and bolster economic activity”(Stratmann/Okolski 3). John Maynard Keynes, an economist of 20th century, suggest that the government should run a deficit if it will create jobs and increase capital gain. This theory support the current stimulus package that has been introduce during President Obama’s term. Although the flaw with this concept is that it makes the assumption the government has done studies and understands which areas needs the funding the most and knows where it will be beneficial, realistically that is not true. “Federal spending is less likely to stimulate growth when it cannot accurately target the projects where it will be most productive” (Stratmann/Okolski 2). This can be seen because political figures will spend money where it directly supports their needs as well. For instance, the political figure would rather spend money to things that will yield a p...
In our opinion government spending is better than tax cuts. Government spending increases the employment as well as the income of the people of the country, though tax cut only increases the wealth of the people who may not spend the extra money earned and help in the growth of the economy.
Fiscal Policy involves the Government changing the levels of Taxation and Government Spending in order to influence AD (Aggregate Demand) and therefore the level of economic activity.
According to Maynard, John (1930), various measured may be taken by government in order to improve the state of the economy and probably move the economy from a recession or even speed this process. Various players can play a role in improving the economic though as Keynesian theory explains the government plays a great role in this compared to other players like the private sector. The government can therefore use various measures through its budgeting policies, fiscal policies and monetary policies by the Central Bank. It’s on this basis that the UK coalition government has proposed slashing of its budget to reduce the overall spending in the economy.
The obligation of the government to stand for the entire public as it designs and manages the economy by shaping the economic growth and development.
The government use of taxes plays a crucial role in today’s economy as well as personal finances, it has and will continue to leave its mark on the world we live in.
Over all the appropriate role of government has always been an argument discussing whether it is actually helping our economy or is the government gaining too much power over the markets. However the economy could not prosper without the actions imposed to assist in diffusing the power over the markets and regulating as well as enforcing the law in order for things to done in a beneficial way to both the consumers and the markets.
In every economy, there are 4 main and 4 additional objectives of government macroeconomics objectives. We can point out that the objectives have their own conflicts which difficult to carry it out at the same time between government macroeconomic objectives. Therefore, government use different policies to minimize the conflict.