Roles of the US Government in the US Economy
explanatory Essay
1146 words
How the US Government plays a role in our US Economy
Fiscal responsibility is an important part of stability and the government must focus on maintaining the economic stability. As we all know, Government dept can quickly become a burden on the economy and weaken it. Macroeconomic policies change credibility of the government and strengthen political institutions. It is very important that our economy has credibility and stability because it’s vital to us Americans long term investment decisions that allow the US economy to grow. Government provide stability by ensuring to maintain stability of currency, enforce-defend property rights, and provide oversight that assures private citizens that their transaction partners in marketplaces are accountable.
Allowing market participants to begin putting their resources back to work in areas they’d be most beneficial. President Obama’s fiscal responsibility summit last February indicated that he understood the urgent need for fiscal discipline. Congress’s enactment of the American Recovery and Reinvestment Act and President’s proposed budget makes the goals of a sustainable budget and addressing nations longer term fiscal priorities, such as entitlement liabilities, even more elusive. The administrations recently released midsession reviews from the office of management and budget that over the next 10 years the accumulated deficits will total $9 trillion which means that the debt held by public will be a staggering 77% of GDP in 2019. If the debt level continues to grow faster than our economy, the US will owe more than it makes.
Government spending and deficits automatically increase during economic downturns due to more demand on social safety net provisions and falling tax revenue...
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...rty was ignored in the social aspect of economics.
Government intervention was and is still necessary to remedy the inequities that evolved from economic liberalism. Antitrust laws were deemed to prevent undermining competition of monopolies and cartels, labor laws to protect rights of workers; public utility regulations to prevent consumer exploitation, food drug laws were designed to protect health of the people, antipollution measures to preserve our environment, safety regulations enforced to protect workers from injury and socioeconomic legislation to promote the common good.
The amount of government regulation, restriction, and intervention in the economy is substantial. No free markets, and rapid innovations in technology and communications, the need for government intervention in the economy is necessary to correct abuses or to promote general welfare.
In this essay, the author
- Explains that fiscal responsibility is an important part of stability and the government must focus on maintaining economic stability. macroeconomic policies change credibility and strengthen political institutions.
- Explains that president obama's fiscal responsibility summit indicated that he understood the urgent need for fiscal discipline. congress' enactment of the american recovery and reinvestment act and president’s proposed budget makes the goals of a sustainable budget and addressing nations longer-term fiscal priorities even more elusive.
- Explains that government spending and deficits automatically increase during economic downturns due to more demand on social safety net provisions and falling tax revenues. borrowing and spending to stimulate the economy using legislative discretion is more difficult to time for right moment and is much risky.
- Explains that a weak fiscal position can cause weak government ability to provide security for property rights, and makes it harder to borrow in the face of security crisis’s.
- Explains that the federal government guides the pace of economic activity, attempting to maintain steady growth, high levels of employment, and price stability.
- Explains that high inflation, unemployment, and huge government deficits weakened the confidence of the fiscal policy as a tool to regulate over all pace of economic activity.
- Explains that franklin d roosevelt's response to the great depression was the "new deal". the united states endured the worst business crisis and highest unemployment rate in history.
- Explains that roosevelt and congress enacted a host of new laws that gave the power to intervene in the us economy.
- Explains that economic liberalism promoted freedom of action for individuals and firms through doctrines of free trade, self interest, private property, laissez-faire, and competition.
- Explains that people seeking personal gain promoted the welfare of the whole community. competition was a regulator of our economy under economic liberalism.
- Explains that government intervention was necessary to remedy the inequities that evolved from economic liberalism. antitrust laws were deemed to prevent undermining competition of monopolies and cartels.
- Opines that government regulation, restriction, and intervention in the economy is substantial. no free markets, rapid innovations in technology and communications, the need for government intervention is necessary to correct abuses or promote general welfare.
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- U.S. Federal Government and Economic Issuesexplanatory essayThis paper relates to what I have learned in the Macroeconomics class. For this final term paper; I will write about the U.S. federal government operations and how government leaders handle macroeconomic issues in our economy. We will discuss a couple of current economic issues and what the federal government is doing to reach solutions. I will also address U.S. unemployment issues, international trade, fiscal and monetary policies, and methods of alternative energy, along with the Federal Reserve’s role to confidently curb recession and avoid inflation The U.S. federal government is actively involved in assuring national security through counterterrorism techniques. They perform strategic planning to give surety of macroeconomic financial stability, and economic development. Government provides financial, political, and social stability in our economy and controls macroeconomic aggregate demand and aggregate supply. Congress and the President control fiscal policy. The Federal Reserve has complete control of the monetary policy. “Fiscal policy is the changes that Congress and or the President make in taxes and public spending that has an impact on the national Gross Domestic Product (GDP) data.” (O’Sullivan, p.212) The GDP (commerce) data is the total market value of domestic goods and services produced only within the geographic area of a country on an annual basis. In accordance to an eHow Contributor, Shane Hall, 2011, reports that, “the burden of various types of taxes distorts funds in the marketplace because the expenses affect the cost and income of goods and services. In the supply side of economics, an increasing tax rate will affect the economic activity and hinder the growth of the economy. (Hall, 2011) In connection ...
In this essay, the author
- Explains that they will write about the u.s. federal government operations and how government leaders handle macroeconomic issues in our economy.
- Explains that monetary policy is the regulation of money supply and interest rates to stabilize currency and control inflation.
- Explains that the u.s. federal reserve monitors and controls monetary policy, national income, price stability, recession, and inflation. top leaders are working better at applying inside time lags in economic policy.
- Explains that the monetary system conducts ‘trustworthy’ international trades with foreign countries to assure the value of the u.s. dollar.
- Cites anthony, p., ib economics: (section 3. 1-3.2) macroeconomics: national income and introduction to development, and (gdp image), 2011.
- Cites ensinger, d., "bill to repeal nafta stalled in the house," copyright 2007 economy in crisis.
- Explains that heffner, t., “unethical predatory practices,” copyright 2007 economy in crisis.
- Opines that more fed stimulus? - don’t count on it!
1227 wordsRead More - The Need for Fiscal Austerityopinion essayDuring the past few years of economic difficulty, many politicians, economists and financial experts, including George Osborne, the current Chancellor of the Exchequer in the UK have mentioned the need to change fiscal policies. He claimed the proper handling and management of these policies, was the only way of recovering from the long backdrop of economic growth – recession. (Reuters UK, 2013) He believed the current spending rate of the UK government, without solid and progressive means of financing it but borrowing, was going to deepen the economic crises and pile up a huge debt for future generations to come, if an immediate step was not taken to halt and correct it.
In this essay, the author
- Explains that fiscal austerity brings discomforting and delicate thoughts to every citizen of the world's mind. these agitating thoughts include high cost of living, unemployment, and adverse hardship.
- Explains that george osborne, the current chancellor of the exchequer in the uk, has mentioned the need to change fiscal policies during the past few years of economic difficulty.
- Explains that fiscal austerity refers to governments' policies on how to generate revenue or money, through increased taxation, while reducing expenditure and borrowing in order to minimize deficit.
- Explains the need for fiscal austerity to reduce the amount of money in circulation caused by increased government spending on such projects.
- Explains that the current uk government, under the conservative party, believes in free markets and trade, and the work of the supreme invisible hands in ensuring a stabilized economic growth.
- Explains that the party's main aim for fiscal austerity, as read in the 2013 national budget, is to reduce deficit and rebalance the economy.
- Explains the austerity strategy adopted by the current government as read in the 2013 budget is to reduce governments borrowing and public spending.
- Explains that the current conservative government has outlined measures and means of reducing such continued borrowing by cutting how much financial assistance the government takes, whilst eliminating or capping what they spend such borrowed monies on.
- Explains that the government's strategy to reduce public spending is to reform the pay structure of the public sector, which has implications and rippling effects.
- Explains that the fall in average demand will have a negative effect on the ad curve and cause prices to fall due to the law of demand.
- Explains that most public sector workers have dependents, which means a reduction in their wages will mean people will be forced to reduce their spending and increase their savings because of fear of economic instability.
- Explains that the law of demand makes us understand that all things being equal, as less production at full employment is demanded due to a fall in average demand, there will be an supply surplus, thus causing general prices of goods and services to fall leading to business contraction.
- Explains that the contraction of businesses leads to further complications, like causing unemployment since businesses and companies will not have enough revenue from sales to pay factors of production.
- Explains that money cycle leakage causes economies to contract. injections lead to economic expansion, while leakages cause economic contraction. failure of consumers to purchase goods and services produced by businesses leads to a fall in business confidence.
- Opines that since public sector workers, labor of such businesses and the citizenry are rational, there is a tendency for them to also anticipate future inflations.
- Explains that in an economy, one person’s spending or expenditure is another person's income. if every household withholds or reduces their spending as a response to the cuts, it could potentially drag the entire economy backwards into what economists refer to as paradox of thrift.
- Analyzes the impact of the government's decision to save billions of pounds from cuts to benefits and welfare on the citizenry and the uk economy as a whole.
- Opines that the government's policies on welfare and benefits are removing child benefits from the better off and capping benefits so that no family out of work gets more than the average family in work.
- Opines that the challenge of welfare reforms comes at a point where these services have had to endure significant cuts in their budgets due to the government's fiscal austerity policies.
- Argues that benefits and welfare are more effective than tax cuts during austerity to accelerate economic growth.
- Explains that cuts to welfare and benefits could lead to increased pressure on local banks in the form of financial assistance. this could result in a shoot up in interest rates and low private sector confidence.
- Opines that the long-term effect of these cuts could flush out fraudulent claimants from the system and increase the chances of genuine claimant who can prove their circumstances.
2137 wordsRead More - Borrowing Money Throughout the US Historycomparative essayThe government made progress throughout the years molding it into the worldwide supremacy of all countries. The government went from powerhouse to a deficit crisis, quickly. The U.S. government deficit exceeded $17 trillion on October 17, 2013 (Amadeo, 2013). In future years, the government will have to pay the deficit off and when that day comes, they will have to make a decision. The government will have to continue to borrow money, but needs to become self-aware of how and where the money goes before resulting to crowding out or future generations’ choices become limited on how to deal with the deficit leaving them no choice but to increase taxes, which can potentially deteriorate the economy.
In this essay, the author
- Compares the effects of borrowing money versus raising taxes and concludes that the government can only come to the same conclusion.
- Describes washington's farewell address, 1796, published by yale law school, yale university, new haven, ct, available from avalon project.
- Explains how the united states brought people together to face their adversities against england to become what the world calls it today.
- Explains how the u.s. debt and deficit differ and how they affect each other.
1473 wordsRead More - Fiscal Policy of the United States Governmentanalytical essayIn 2008, the U.S. economy underwent a severe crash that left many wondering about the future heath of the economy, and weather or not it would be brought to its knees, diving into a deep recession/depression. This is where the Federal government stepped in with an $800 billion dollar stimulus program to help lift the U.S economy up, preventing such a catastrophe from happening. When the Federal government steps up in such a way as this, it is called fiscal policy. Fiscal policy involves making alterations in government appropriations and income from taxation in order to “achieve full employment, control inflation, and encourage economic growth” (McConnel, Brue, Flynn).
In this essay, the author
- Explains that the federal government stepped in with an $800 billion dollar stimulus program to help lift the u.s. economy up, preventing such a catastrophe from happening. fiscal policy involves making alterations in government
- Explains that the sixteenth amendment gave the federal government the power to collect income taxes on all americans. income tax rates started at 1% for individuals earning over $3,000, and 6% on incomes over $500,000.
- Explains that there is debate in congress as to the effectiveness of the current tax policies, and whether or not they hurt or help economic growth.
- Argues that lower tax rates would put more money back into the pockets of americans, increasing discretionary spending on goods and services.
- Analyzes how the federal government agrees on a yearly budget through senate and house appropriation committees and subcommittees. the divisions in congress are enough to infuriate most americans that pay any attention to the politics in washington.
- Analyzes the dispersement of government funds for the fiscal year 2013. the current debt of the u.s. government is 17.4 trillion dollars.
- Opines that the current economic situation shows signs of growth and unemployment is slowly creeping down. as americans gain more confidence in the future economic outlook, the economy should pick up even more
819 wordsRead More - The U.S Budget Deficitargumentative essayThe U.S budget deficit over the years has been a problem but lately the deficit has shrunk. However, what made the U.S budget deficit get to where it is today and what will it be like in the years to come. Throughout the past the U.S has operated under a deficit. This means that the U.S Spent more money than it was taking in. The cause of the excess in spending was different depending on which year. Some of the causes were war, increase in spending , and economic downturns. There were different acts passed to try and control the deficit problem. The deficit at the present time is declining. This decline is due to the improving economy, sequester, and a tax increase on high-income households. The big factor that went into the decline in the deficit for 2013 was the payment that Fannie Mae and Freddie Mac made. The deficit decline in the present time may make some think the U.S could get out of debt but it has been projected that the U.S deficit will start to increase once again.
In this essay, the author
- Analyzes how the u.s budget deficit has shrunk over the years, and what it will be like in the future.
- Explains that the u.s has had more budget deficits than surpluses due to excess spending and not enough revenues to pay for it.
- Explains that the u.s government's debt fluctuated from $22 billion to $221 billion during 1971 through 1997 but did not make more than 6% of gdp.
- Explains that the high revenues only lasted until 2010, when the gdp fell to almost fifteen percent of gdp. the increase in spending is another major cause in the federal deficit.
- Analyzes how the treasury department's data shows the 2013 annual deficit is smallest since 2008 and how it declined seventy-nine percent because of higher receipts.
- Predicts that the u.s budget deficit will fall to two percent of gdp by 2015, followed by an increase in interest costs and spending for social security and health care.
- Predicts a seven percent decline in total spending on health care programs, social security, and net interest payments, while the federal debt will grow to five percent of gdp by 2038.
- Explains that the u.s budget deficit has been a problem in the past, present, and future.
- Cites sahadi, j, singer, m., and utah foundation's article on u.s. federal deficit and debts.
1510 wordsRead More - The Fiscal Deficit Crisis in the United Statesopinion essayThe Fiscal Deficit Crisis in the United States Since the inauguration of George W. Bush as the president of the United States in January 2001, a series of issues and problems have appeared. President Bush created problems in education, finance, medicare, social security, as well as foreign affairs. In addition, he has turned a 500 billion dollar surplus into a 500 billion dollar deficit (“Historical Tables” 2004, 21-22). We must ask how he could do this. Were funds spent on improving education, social security, or healthcare?
In this essay, the author
- Analyzes the fiscal deficit crisis in the united states since george w. bush's inauguration in 2001. he created problems in education, finance, medicare, social security, and foreign affairs.
- Explains that in the 20th century, there were 73 years with a deficit in government budget. the trend of having surplus in fiscal reports couldn't continue after george w. bush took office.
- Argues that the underlying reason for the deficit in the budget is due to the mismanagement in spending and taxing policies adopted by the president.
- Explains that george w. bush adopted the republican doctrine in order to create balanced budgets in his term. conservatives favor less expense and less income for the government.
- Explains that the united states increased the funding for military and homeland security after 9/11. the tax cuts introduced in bush's term reduced fiscal receipts significantly to less than 5%.
- Opines that the bush administration's fiscal policy has to be corrected, or america will fall into the deep trough of poverty and depression.
- Recommends the government reverse the current budget policy by raising taxes and fees for government services and increasing funding towards non-defense sectors.
- Suggests the introduction of a nation-wide income and corporation tax increase. the wealthy are the only group of people who benefit from the tax cuts in the bush administration.
- Urges congress to reverse the current financial situation by increasing taxes on the prosperous population by at least 25%. taxes will finally serve their purpose—to even out the unbalanced distribution of wealth in the nation.
- Encourages the administration to increase funding in non-defense traditional sectors such as education, social security, health care, environment, agriculture areas.
- Explains that increased funding in various traditional sectors will have positive outcomes individually. schools can have smaller class sizes if more funding is provided for extra teachers and classrooms.
- Explains that if government funding to social security and health care sectors was increased significantly, people would pay less for their health services and have more money for retirement.
- Opines that if the government increased spending in non-defense sectors, the fiscal budget would be balanced and surpluses would develop.
- Argues that instead of using war to solve an international crisis, the government needs to use alternative ways, such as diplomacy.
- Argues that the problem could be solved by diverting more resources on diplomacy and encouraging us investments in economy-battered periphery nations.
- Opines that increasing taxes, increasing expenses on non-defense, and decreasing military expenses would effectively balance the budget in the future.
- Opines that it is a good time for young voters to review the fiscal disaster created by bush.
- Cites the united states department of treasury's budget message of the president and its summary of accomplishments and future challenges.
2028 wordsRead More - Political Majority and Federal Spendinganalytical essayGovernment spending should be the most studied component of GDP. Currently, federal spending accounts for approximately 20% of GDP (Lazear 2010). Economists and legislators are in disagreement as the exact effects of government spending. Moreover, proposed legislation is “being judged not by their impact on spending and taxation, but by their projected effect on the deficit” (Lazear 2010). This is evident by a $1.6 trillion project deficit this year (Reddy 2010). Even the current Chairman of the Federal Reserve, Be...
In this essay, the author
- Hypothesizes that a majority congressional representation by either the democrats or the republicans does not affect the level real federal government spending.
- Compares the democratic party to boyle and matheson (2009). the republican party never achieved a two-thirds majority in either house, while the democrats did 20% of the sample.
- Explains that they did not run a probit and logit analysis to determine the likelihood of the democrat majority increasing real federal spending.
- Explains the united states senate. party division in the senate, 1789-present.
- Argues that partisan control of congress is a determinant of federal spending, and academics are more likely to predict overall government spending.
- Argues that legislators spend to stimulate the economy and benefit their represented district, thereby increasing the likelihood of reelection.
- Explains that their dataset is comprised of four categories: descriptors, dependent variable data, independent variables, and control variables.
- Explains that barro, robert j, and charles j redlick, "stimulus spending doesn't work." the wallstreet journal, october 1, 2009.
- Analyzes ferreira, fernando, and joseph gyourko's "do political parties matter? evidence from u.s. cities."
- Explains the office of the clerk, party division, house of representatives, and olive, ronald w., "stocks go down when government spending goes up."
2000 wordsRead More - National Deficit and National Debtexplanatory essayThe growing national deficit is a looming problem in the United States now more than ever. The national debt is constantly increasing and government spending is out of control. If these issues are not solved then they could spell disaster for the nation’s economy when the infamous debt ceiling is finally reached. Currently the national policy on the debt is to continue raising the debt limit until a solution is found that is agreeable between both parties in Congress. The two main issues of over spending and the constant raising of the debts ceiling by Congress can both be resolved by government spending reform, balancing the federal budget and initiating pro-growth policies in order to increase the government’s tax revenue.
In this essay, the author
- Opines that the growing national deficit is a looming problem in the united states now more than ever. if these issues aren't solved, they could spell disaster for the nation's economy.
- Explains that the debt ceiling is the limit on how much money the government can borrow before it must shut down and begin paying off its debts.
- Explains that overspending is a pertinent problem facing the lawmakers in congress. in 2012 discretionary spending reached $1.3 trillion and mandatory spending $2 trillion, while only bringing in $2.5 trillion in revenue.
- Opines that government spending needs to be restructured and balanced between the different needs of the country.
- Cites boccia, fraser, and goff's federal spending by the numbers, 2013: government spending trends in graphics, tables and key points.
- Opines that raising taxes and reducing government programs would be better than running into the debt ceiling and having the government shut down.
- Cites goff, e., sahadi, j. and sargent, m.
968 wordsRead More - Private Economy: Effects To American Public Economyanalytical essayEconomic growth and development occur when people are able to make use of their country's resources properly and make them valuable. However, the desired economic growth and development does not happen in an instant. One of the factors that contribute to the attainment of these two is the government intervention on economic activities. Undeniably, the government plays a vital role in the economic stability of a country. Campbell believes that restoring economic stability requires policymakers to focus on giving remedy to emotional crisis: the government is responsible for providing a stable environment where economic growth is attained, while maintaining stability to the country's currency, as well as defending
In this essay, the author
- Explains the importance of government intervention in economic activities and how it affects the american public economy in the larger scope.
- Analyzes how the great recession of 2008 stimulated america's public economy by dispersing money to the economy and stimulating business activities.
627 wordsRead More - The United Stated Federal Reserve Boardexplanatory essayIt is normal for budgets to tend towards deficits when the economy experiences a slowdown or recession. This is because government revenues decline during a downturn (tax revenues fall as workers lose their jobs and reduce their spending); meanwhile, expenses for unemployment insurance and other social programs automatically increase.
In this essay, the author
- Explains that the federal reserve board conducts monetary policy to reduce unemployment by lowering the interest rate that it charges banks.
- Explains that central banks raise interest rates to re-establish unemployment, restrain wages, and reinforce labor discipline, but they can't directly quote it without using quotation marks.
- Explains inflation is a general increase in the prices of all goods and services. the us federal reserve attempts to control inflation, protecting financial assets, and keeping labor markets strictly in check.
- Describes marx's concept of exploitation, which would make it easier or harder for employers to exploit employees during a recession.
- Explains that recessions occur when a country's real gdp begins to shrink. even milder economic slowdowns can create unemployment and dislocation.
- Opines that profit represented a new, more subtle form of exploitation. marx tried to explain how prices in capitalism could still be based on the underlying labor values of different commodities.
- Explains that mainstream economists prefer programs like section 8 over rent control or rent stabilization.
- Opines that rent control has undesirable side effects, such as firms having less incentives to perform maintenance on buildings and discriminating among renters.
- Describes the terms budget deficit, surplus, and government debt. do you think the current u.s. federal debt is a serious problem?
- Explains that it is normal for budgets to tend towards deficits when the economy experiences a slowdown or recession.
- Opines that unless china can find another country as big as the u.s. to sell their goods, the debt will not be a problem.
1074 wordsRead More