Often when one thinks of the scope of business, running a country rarely enters into an individual’s mind. However; that is what the country is, a large business conglomerate for an entire country. Citizens entrust their government to maintain this feat. There are many intricate details in maintaining the nation’s financial and economic health. In the United States, the President and Congress govern the financial and economic health of the nation. The United States employs the fiscal policy to monitor and make deliberate changes to escalate or slow down the country’s economy. The fiscal policy process occurs via changing government expenditures and taxes that have a direct impact on the nation’s Gross Domestic Product (GDP).
Debt, deficits, and surpluses related to the government budget have a direct impact on tax payers in the U.S. Payment for the national debt comes from revenue received by the government through the taxes it collects. If the amount of tax is not sufficient to cover the liability, the result is a deficit. The government will determine the best method to offset this deficit, such as raising tax rates. The rising government debt can also lead to the reduction of the nation’s credit rating, potentially leading to a lower standard of living for generations to come. Per a report from ABC News, “savings of taxpayers may diminish in worth, the economy could see a lag in wage increases, and create fewer jobs” (Drowning in Debt, 2010).
Future Social Security and Medicare Users
The U.S deficits, surpluses, and debts affect Social Security and Medicare users, because when the economy is facing any of these problems one of the ways the government acquires the funds to help is by drawing...
... middle of paper ...
...rieved April 18, 2014, from http://www.bls.gov/opub/focus/volume1_number11/ipp_1_11.htm
Ludwig von Mises Institute. (n.d.). Economic nationalism is a philosophy of war. Retrieved from http://mises.org/daily/4934
Moreland, J. (2014, February 2). Economy In Crisis. In U.S. Trade Deficit Fosters Unemployment. Retrieved April 17, 2014, from http://economyincrisis.org/content/lack-jobs-due-our-massive-trade-deficit
Nordqvist, J. (2013, October 21). What are the most powerful countries in the world? Retrieved April 17, 2014, from Market Business News: http://www.marketbusinessnews.com/most-powerful-countries-world/3447
Riley, C. (2014). S & P rating: Ripple effects of downgrade. Retrieved from http://money.cnn.com/2011/08/06/news/economy/sp_rating_fallout/index.htm
Tucker, I. B. (2011). Macroeconomics for Today (7th ed., p. 349). Mason, OH: South-Western Cengage Learning.
Need Writing Help?
Get feedback on grammar, clarity, concision and logic instantly.Check your paper »
- ... The model shows that during times of economic recession, a $1 billion investment in non transfer payments actually decreases per capita GDP by $12.88. The negative relationship still holds during times of economic expansion: a $1 billion investment in non transfer payments leads to a decrease in per capita GDP of $10.17. If we combine these results and the fact that we found that transfer payments have no statistical significance, we can infer that an expansionary fiscal policy in times of economic recession has a negligible impact on GDP growth.... [tags: value of monetary and fiscal policy]
1108 words (3.2 pages)
- The gross domestic product (GDP) is an essential component of measuring business cycles. The most universal description of a recession is two uninterrupted quarterly declines within the GDP, which is basically the totality of every good and service that a country produces (Shenk, 2008). This description may be deemed as one-dimensional due to the fact that GDP is a measurement of the national economic performance based on a sole economic statistic. By examining just one component of the economic activities, an assessment is determined based on the entire economy.... [tags: Economics]
696 words (2 pages)
- 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]
1096 words (3.1 pages)
- ... Government centres in the form of police stations and courts were part of the plans. In order to curb unemployment, education and skills development were at the fore. There was a shortage of skilled labourers in the market. The areas where education for these skills would be funded were engineering, scientists, managers, artisans and IT technicians. (Roux, 2008) What is the monetary policy. The monetary policy is a strategy that the South African Reserve Bank uses to control the demand for money as well as the supply of money in order to achieve certain goals.... [tags: borrowing money, monetary policy]
1702 words (4.9 pages)
- During discretionary fiscal policy the government spends and taxes to change the economy during a particular problem. Both Congress and the president have to take action when they agree that the economy is in need. When they do this they are trying to simulate the economy during a time of recession. Economists thought discretionary fiscal policy would eliminate the instability of the recession, however most had given up on the idea by 1980. The most noticeable discretionary fiscal policy is the discretionary budget.... [tags: economy, discretionary budget, taxes]
693 words (2 pages)
- John Fitzgerald Kennedy (JFK) ran for office against Richard Nixon during the recession of 1960. JFK took office January 20, 1961, becoming the 35th President of the United States; he was assassinated November 22, 1963. JFK, during his brief time in office he was known for his foreign policy actions to stern communist expansion in Cuba, Berlin and with nuclear weapons. These national crises eclipse his impact on the U.S. Economy, which he was not as we'll known. Contractionary Monetary Policy caused the recession of 1960, as the federal Reserve raised interest rates to curb a growth rate from 1959; with a shrinking economy and unemployment at its highest by the time of the election of 1960—P... [tags: US economic history]
1148 words (3.3 pages)
- Fiscal policy, as we know it today, is meant to mitigate unemployment and stabilize the economy through aggregate demand. Despite dismal unemployment numbers, politicians and policy-makers continue to use and be optimistic about the effectiveness of fiscal policy in this regard. Policy as we have seen over the past five years has had dismal effect on the unemployment numbers we are seeing today. It seems we need a policy that will tackle lagging aggregate demand as well as the employment problems.... [tags: Economics, Unemployment Essays]
4107 words (11.7 pages)
- The Fiscal policy is an instrument of the Australian government to achieve economic stability. It involves the Commonwealth Government changing expenditure and revenue to achieve a range of economic objectives. On the 12th May, treasurer Joe Hockey released the budget statement, indicating their intentions on producing a fiscal deficit outcome. The Australian government plans to create a smaller deficit than previous years by conducting a contractionary fiscal stance, forecasting its deficit to contract from 2.6% to 2.1% of GDP between 2014/15 and 2015/16.... [tags: Inflation, Macroeconomics, Economics, Australia]
1264 words (3.6 pages)
- Objectives The main objective of the study is to find out the impact of fiscal deficit on economic growth Secondary objectives are: - To find out the trend in Fiscal deficit and Economic growth - To find out the relationship between Fiscal deficit and Economic growth. - To find out the mean difference between the levels of Economic growth across the time period - To find out the mean difference between the levels of Fiscal deficits across the time period H1: There is a significant impact of Fiscal deficit on the Economic growth H2: There is significant relationship between Fiscal deficit and Economic growth H3: There is a significant mean difference between the levels of economic growth ac... [tags: research, economy, statistics]
1151 words (3.3 pages)
- 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]
494 words (1.4 pages)