During recent political campaigns, taxes and budget policy were key issues. White House budget packages are often designed to stimulate economic growth. From the library or from www.whitehouse.gov, obtain a current summary of government spending and tax legislation signed by the president.
Write a brief description of the fiscal policy of the United States. Would you describe it as “expansionary” or “contractionary”? How can American consumers influence decision makers on fiscal policies? Explain and discuss if and how this has changed over the past 5 years.
Fiscal policy is connected with tax policies and federal government’s spending which are necessary for dealing with inflation, the level of unemployment and economic downturn. It is known that in the United States there is an expansionary fiscal policy. The major role is played by the expenditures of the budget and income which influence the economy of the country including the sums of money spent on loan increasing national debt. The major goal of expansionary fiscal policy is to stimulate the economy and to reduce unemployment and recessionary gap.
It is also known that since 2004 to the present day the number of expenditures of the US government increases the national debt which is more than $8 billion. Due to this fact and to the increasing consumption of the goods and the services in the country, fiscal policy is expansionary.
One more fact is that the major part of the government spending is far more than the returns of the expenses. The most part of the US government budget comes from the expenses on the following institutions – the US Department of Defense, Health and Human Services, and the Treasury Department. It is difficult to say that the consumers can greatly influence the decision makers on fiscal policies but they may play some role in economics. They can represent their opinions by means of voting and protesting and in such a way they can influence the decision makers on fiscal policies.
Over the past five years the US national debt has been increased and it will not be reduced in the nearest future but it influences the US economy each fiscal year.
The economy of the USA is unbalanced as over the past five years there were tax increases and decreases, lowering and rising rates. So, I think the influence of the consumers is not too powerful.
Monetary and Fiscal Policy. United States Economy. Retrieved from:<www.countrystudies.us/united-states/economy.htm>