Fiscal policy
The fiscal policy of a government revolves around the activities of the government in attempting to change the economic state of the country. The government has got varieties of different ways of influencing the current economy of the country. At a time, the government plans and spending can lead a country to a very critical financial condition. These financial conditions affect the countries investment, employment rate as well as the national savings. Such government activities tend to change or influence the countries’ economic. The countries’ economic conditions affect its economic growth. The effect cannot be immediate and it is also not predictable but, it is a sure thing that it would occur at no given time in the economy of the country. Through the inflation in the country’s economy, the United States government comes with the scrutinized policy to figure out the economic crisis that is currently experienced in the state. Policies are designated in such are the way that they influence the way market moves (Stokey pg. 125). The paper here analyses the United States government act to scrutinize its policy in order to cab issues related to the country’s economic.
Looking at how the United Nations is doing, our point on this is designated in answering questions pertaining the economy of the United States at large. The united states are not generally doing well in their economies. They are experiencing economic inflations for a couple of years. The economic inflations have greatly been influenced by the government policy on controlling the economy. The government way of spending leaves united nation at a point that critically affects its nation’s economy. Also bearing in mind the huge amount of debt they have, they are not doing well. The united nation government is now using some of the fiscal policies to cab the issue of economic inflations. The united states are now not doing that good because there is an increased rate of unemployment that affects it’s economic hence an inflation in the economy. The increased unemployment rate has forced the United States into getting to a more interesting point to settle the issue; hence they are not doing that good.
With over $ 20 trillion debt, the United States is not doing well as much as the economy is concerned. The national debt of the United States affects the countries investors from performing effectively; this is because there is a change in the route of taxation. The over $ 20 trillion United States debt, the government will try to fix employers hence affect employment
Yes, I do agree with the United States approach toward the managing of their economic growth. Currently, the United States government has changed their way through which they spend money. It is one of the greatest policies as it focuses on keeping people busy with business by circulating money to them (Bianchi et al pg 113). The United States government is keen on the crisis. By circulating more money to reach consumers, it is helping in the creation of job which will not be necessary to get employed by the government. Such policy of the government will create more sources through which the government would be drawing money from. The united government through their policy is in position to generate more sources of income and be relieved out of such an economic situation.
Still, I agree with the approach because there are several and obvious ways through which the government get out of the financial crisis and from the huge debt too. Through the reduction of tax, the government would have formed one major way through which an individual can solve the issue of unemployment. The reduction in the government taxations over the country’s businesses would help businessmen get up with their business well, and there will be a continuous flow of tax. The small continuous flow of taxation would gradually help the government and increase their national saving. The national savings would help the United States government in way of using money and reduce the need for seeking loans from abroad. Increasing the government spending can also help in managing the economics of the United States. By increasing the government spending, consumers are going to benefit in one way or the other, and this is more effective as it helps the consumers save the little bit of what has been cut. Such is a great activity of the government and slowly advance they make.
Though I agree with cutting taxes and the government way of spending money, there are several incidents that the United States has in action to efficiently cub the situation. By knowing when the right time to cut tax is and when the exact time to reduce the government spending is, would really help in growing the economy. In the same way, the government will be able to gain trust from consumers. The United States government shall learn how to reduce the government spending when it is in time of inflation. When they reduce their spending, it would help balance the economic inflation. Such government action can help to achieve the set policy. It will be playing a significant role in seeing the national saving through.
The automatic stabilizer regulates the country economic state, and it is something I totally agree with. The automatic stabilizer is a good policy since it does not rely on voters to pass. Automatic stabilizers favour the consumers because tax, in this case, is cut. When the tax is cut by automatic stabilizers, there would be growth in economic, and what the consumer saves little can facilitate the start of another of business that will help in growing the economy. The small investment generated out of small saving would help to fix the inflations and hence a positive move to agree with. The automatic stabilizer would help in automatic regulation of the government way of spending money. The policy is full of positive sides that I should agree with.
Now looking at its importance, the automatic stabilizer is best because there will be no obstacles in the way regulating the activities. Even though those in the authority might tend to get things done in their own interest, the automatic stabilizer does not work in such a way. With its way of automatic adjusting tax and the way government spending, the automatic stabilizer is one of the best government policies.
Debts and national concerns, I also agree with this policy because is fair and effective when it comes to debts and national concerns. The redistribution of income would help the state pay their debts without causing a great negative impact on the economy (Dupor et al pg. 16). The policy is fair in such a way that those with higher amounts of salary income should pay higher interests to pay the debts. It is a good idea because those with low incomes might slightly be affected. The effect would not affect their employment, especially those with own created employment.
Unintended consequences might arise out of their current actions. The policy of national debt and concerns might make individuals think in a different way. They might decide to take a different path. When those with relatively higher income are taxed highly, they might tend to think that there is no justice and that their rights are violated. It could be a consequence because it might affect those who will fail to withhold that decision and hence the economy. Such an act can even worsen the national debt and concern. The situation can be so because the rate of payment might have been affected in one way or another.
There could be a consequence of the United States government not performing up to their expected level. It is because there will be minimized ways of spending money on the important issues that concern the state’s economy (Rendahl pg. 1189). The economy at that point could have been averted, and this might cause a serious economic consequence, basing on their current actions. The time consequences might appear could not be gauged. It would have been of great importance if their policies could have been based on the two possible ways of outcomes. It would have been of major significance because if such a scenario occurs more would be learned about it. The kind and magnitude of consequence will determine how much was done in cubing the situation
When it comes to the rating of their success as based on the effort they have put in managing the state’s economy. I would rate them 7 out of ten. Looking at the effort and the policies they got in place, they are vastly trying to figure and fix things out. They are at a point where more effort focuses on employment issue and the economic growth of the country. It is one of the significant ways of managing and controlling the country’s financial situations. The remaining 3 are denied because they failed to focus on the outcome if the important policy fails. When one of the policy fails there will be the consequence, and this was not addressed. The example in a point where those individuals with a relatively higher income pay more than others, they were supposed to pay attention at this point. What could have happen?
In summary, fiscal policy is the government policy through which it uses to control the country’s economy. The United States current situation is not good; there are reduced chances of employment and the inflation in the economy. The government of the United States has policies that are in place and in managing the state’s current economy. There are some of the approaches which I agree with because they are efficient. There is also the possibility of unintended consequence that results from the current policy action.
Work cited
Stokey, Nancy L. “Aggregative Fiscal Policy.” Journal of Political Economy 125.6 (2017): 1756-1761.
Bianchi, Francesco, and Cosmin Ilut. “Monetary/fiscal policy mix and agents’ beliefs.” Review of Economic Dynamics 26 (2017): 113-139.
Dupor, Bill, and Rodrigo Guerrero. “Local and aggregate fiscal policy multipliers.” Journal of Monetary Economics 92 (2017): 16-30.
Rendahl, Pontus. “Fiscal policy in an unemployment crisis.” The Review of Economic Studies 83.3 (2016): 1189-1224.
