Essay about Fiscal Irresponsibility

Essay about Fiscal Irresponsibility

Length: 1619 words (4.6 double-spaced pages)

Rating: Powerful Essays

Open Document

Essay Preview

President Obama said, "We are facing the worst economic crisis since the Great Depression." The jig is up, the news is out. The National Bureau of Economic Research announced what many economists have been saying for years, that we have been in an economic recession since December 2007. The housing bubble which burst in late 2006 has left thousands of Americans homeless and many banks failing or on the verge of failure. The resulting subprime mortgage crisis has led to one of the worst credit crunches in history. The DOW Jones Industrial Average which crashed in late October 2008 has lost nearly half its value, leaving many Americans without a means to retire. The causes, bad domestic securities and assets, have even spread abroad and have wrought financial havoc on a global scale. The financial sector is in a state of panic, its future is uncertain at best, and the banking industry is teetering on collapse. Now with all the ups and downs of the financial history globally and in the United States, the pervading fiscal, economic, and political failures wrapped around the United States’ debt could cause a complete economic austerity.
The nation's unnerving descent into debt began a decade ago with a choice, not a crisis. In January 2001, with the budget balanced and clear sailing ahead, the Congressional Budget Office forecast ever-larger annual surpluses for the foreseeable future. Voices of caution were swept aside in the rush to take advantage of the apparent bounty. Political leaders chose to cut taxes, jack up spending and, for the first time in U.S. history, wage two wars solely with borrowed funds. Now the national debt of $14 trillion is larger, as a percentage of the economy, than at any time in U.S. history except for the...

... middle of paper ...

...the world has survived the “Latin American debt crisis, the European monetary upheaval of 1992, [and] the Mexican bailout of 1994,” yet without some quick actions the world could witness another economical breakdown in the US (Garten).

Works Cited

Altman, Robert C., and Richard N. Haass. "AmericanProfligacy and American Power." Foreign
Affairs (2010). Web. 1 May 2011. .
Garten, Jeffrey. "Lessons for the Next Financial Crisis." Foreign Affairs 78.2 (1999): 76-
92. Jstor. Web. 1 May 2011. .
Shelton, Judy. "Currency Chaos: Where Do We Go From Here?" The Wall Street
Journal(2010). The Wall Street Journal. Web. 1 May 2011. .

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

The Need for Fiscal Austerity Essay

- The idea of fiscal austerity brings about discomforting and delicate thoughts to every citizen of the world’s mind; these agitating thoughts include high cost of living, unemployment, and adverse hardship, amongst others. During 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....   [tags: new fiscal policies for the UK]

Powerful Essays
2137 words (6.1 pages)

Use of Monetary Policy and Fiscal Policy During The Great Recession Essay

- How can monetary policy and fiscal policy greatly influence the US economy. Keynesian economics says, “A depressed economy is the result of inadequate spending .” According to Keynesian the government intervention can help a depressed economy through monetary policy and fiscal .The idea established by Keynes was that managing the economy is a government responsibility . Monetary policy uses changes in the quantity of money to alter interest rates, which in turn affect the level of overall spending ....   [tags: Monetary Policy, Fiscal Policy]

Powerful Essays
1100 words (3.1 pages)

Demand Management and Fiscal Policy Essay examples

- Demand Management and Fiscal Policy Fiscal policy is the manipulation of aggregate demand using taxation and or government spending. The government tends to make most of its fiscal decisions in the annual budget, usually announced in March of each year. However, there are a number of problems in using fiscal policy to control aggregate demand - one of the most significant is the problem of time-lags. 1. Time Lags Many aspects of fiscal policy have a delayed effect on aggregate demand. Changing the fiscal stance can take some time to achieve....   [tags: Fiscal Policy Interest Rates Essays]

Powerful Essays
1016 words (2.9 pages)

The Irresponsibility of European Monarchy Essay

- Europe in the early years was a time of great metamorphosis. As Louis XIV, Napoleon, and Elizabeth I developed and shaped the society, the essence of modern European history is created. By analyzing Louis XIV, Napoleon, and Elizabeth I, one can gain a clear view of the disadvantages of monarchy and absolutism referring to its irresponsibility, uncertainty, and collapsibility between the dispersal of rights and responsibilities. Perhaps the irresponsibility of the monarchs was the main cause of the abolition of monarchy....   [tags: World History, Government]

Powerful Essays
1449 words (4.1 pages)

Fiscal Policies : The Fiscal Policy Essay

- In today’s economy, fiscal policy plays a vital role in influencing the financial direction and economic goals of the United States. Furthermore, government spending and taxation are two main economic activities that influence a nation’s economy and are generally referred to as the fiscal policy. Not only does the fiscal policy help determine a nation’s budget, but it also determines how much resources need to be allocated to help achieve their economic goal. Therefore, the fiscal policy has many functions and consists of allocating, distributing, stabilizing and developing the nation’s economy....   [tags: Keynesian economics, Macroeconomics, Recession]

Powerful Essays
1096 words (3.1 pages)

Essay on The Irresponsibility of Firestone

- The Irresponsibility of Firestone “It was extremely difficult to control the truck at the time, and I had both my wife (two months pregnant) and my 16-month-old daughter screaming and crying in a panic...My wife has developed a fear of the only vehicle we have, understandably so. She fears other tires may also be defective and that we may be in danger” (Nathan). Much like the 4,300 similar complaints the National Highway Traffic Safety Administration (NHTSA) has received, this Firestone tire consumer warned the agency of the faulty product and asked it to take action....   [tags: Exploratory Essays Research Papers]

Free Essays
1342 words (3.8 pages)

The Welfare State and Moral Irresponsibility Essay

- The Welfare State and Moral Irresponsibility President Bush has declared the fourth week of April to be National Volunteer Week. This is a follow-up to his call for all Americans to do two years of community service during their lifetimes, and his creation of the new federal USA Freedom program to pay volunteers and to encourage service. But should we all really rush out to man the ladles at the nearest soup kitchen. Is such service really good for America. Let's start by clarifying some moral confusion....   [tags: Argumentative Persuasive Topics]

Free Essays
685 words (2 pages)

Essay on Fiscal Policy

- Fiscal Policy can be explained in many ways, for example. Fiscal policy is the use of the government budget to affect an economy. When the government decides on the taxes that it collects, the transfer payments it gives out, or the goods and services that it purchases, it is engaging in fiscal policy. The primary economic impact of any change in the government budget is felt by particular groups—a tax cut for families with children, for example, raises the disposable income of such families. Discussions of fiscal policy, however, usually focus on the effect of changes in the government budget on the overall economy—on such macroeconomic variables as GNP and unemployment and inflation....   [tags: essays research papers]

Powerful Essays
733 words (2.1 pages)

Essay on Fiscal Policy

- Fiscal Policy Most people nowadays seem to think that fiscal policy cannot be used to influence economic activity, and they are supported in this view by the majority of professional macroeconomists. Students are taught that output and employment are determined by the demands and supplies of individuals interacting in a gigantic market and that governments cannot alter the outcome of this process except temporarily and destructively. The Congressional Budget Office (CBO) bases its projections of the federal budget on assumptions about output that are largely independent of fiscal policy....   [tags: Papers]

Powerful Essays
494 words (1.4 pages)

Fiscal Policy Essay

- Fiscal Policy Supposing the status quo of the United States today states that: there is no real unemployment, the consumer price index is rising at 2 percent annually, and the federal government budget deficit, 200 billion dollars, is equal to 5 percent of the gross national product. Now, the question is how and what changes will result from fiscal and monetary policy. For example, if legislation has just passed which holds government spending constant and raises personal income taxes enough to balance the budget, then obviously the deficit would cease growing, as mentioned, along with other fluctuations of the gross national product as a whole....   [tags: essays papers]

Powerful Essays
602 words (1.7 pages)