Fiscal Policy Essay

Custom Student Mr. Teacher ENG 1001-04 24 October 2016

Fiscal Policy

The United States’ economy has gone through many different stages from deficits and surpluses to a large debt. These can affect people in many ways. This paper will cover the United States’ deficit, surplus, and debt and how it affects taxpayers, future Social Security and Medicare users, unemployed individuals, University of Phoenix students, the United States’ financial reputation on an international level, a domestic automotive manufacturing exporter, an Italian clothing company importer, and the Gross Domestic Product (GDP). Tax Payers

The United States’ deficit, surplus, and debt effect taxpayers greatly. The deficit affects taxpayers because when the country is running a deficit, it means that the supply of money is low. The taxpayers are then called upon to lessen the low supply of money that the government uses to run. A surplus affects taxpayers because even though the country may be running a surplus and taxes decrease, they are still there. The citizens of the country will still be required to pay taxes even if there is a surplus. The country’s debt affects taxpayers the most because it is the tax revenue that is used to pay off the debt that the country has gotten itself into. Future Social Security and Medicare Users

The future Social Security and Medicare users will be impacted by the United States’ deficit, surplus, and debt. The United States’ surplus can be beneficial for the future of Social Security and Medicare because it provides additional funds into the funds that are already available. However, this is not the same with the deficit and the debt. As the deficit and the debt increases, more funds are borrowed from these trust funds, which are eliminating any surplus. Before long, funds for Social Security and Medicare will be exhausted, and the programs will no longer be able provide help to the disabled and elderly. Unemployed Individuals

The United States deficit, surplus, and debt do have effects on the unemployed. During a deficit, the employees can find themselves unemployed and trying to find another job but with the government budget having to make cuts the unemployed employees are having issues with finding new jobs. Even the surplus budget can cause changes with the workforce. The problem is that with the government having a surplus of resources, it can cause the employee to overspend and things can change very quickly to where the government is back to a deficit, which in return causes employees to lose their jobs. University of Phoenix Student

The United States deficit, surplus, and debt have an impact on the University of Phoenix students as well. Many of the students at the University of Phoenix depend on financial aid from the government to help pay for their schooling expenses. When the budget is lowered some of the students that attend the University of Phoenix will not be able to pay for classes on their own and will be forced to drop out of school. On the other hand if the United States had a surplus the government would be able to raise the budget for education and put more money towards schooling. The United States Financial Reputation on an International Level The United States financial reputation on an international level is becoming an issue that has been debated repeatedly; it sometimes becomes a fundamental and comprehensive issue that hinders the acknowledged strength of the U.S. as a “power-house” on an international level. The United States financial reputation on an international level is given its proper respect, the major problem that is seen in the stock market and the Nasdex are the budget deficit and the U.S. debt, which limits the resources to spend on production and investments. A domestic automotive manufacturing (exporter)

The United States national debt could also affect exporters. When the United States deficit is high and the government owes money, interest rates are raised. The increased interest rates have an effect on domestic automotive manufacturing companies. Domestic automotive manufacturing companies would have to let go some of their employees or outsource to another country that has a competitive lead in labor and production costs, due to the company’s loss of income. However, when the government is operating under a surplus interest rates are lowered. Making it affordable for domestic automotive manufacturing companies to produce more and grow their company, which supports spending increasing the number of jobs and the export of goods.

Italian Clothing Company The deficit, surplus, and debt of the United States affects an Italian Clothing Company because; when it comes down to the United States deficit, it would cause the market to be over-run by foreign products. The rate in which a country is exporting is not at the level with it’s’ exports, a surplus would lead to more importation by the Italian Clothing Company and debt, it would cause the imports to be reduced (because many business partner would be hesitant to do business with the importer. Gross Domestic Product (GDP)

The Gross Domestic Product (GDP) is a better way for the government to measure how the nation handles deficit. It also provides input on the nation’s capability of paying off debt. The GDP helps determine what size deficit and how much debt the nation can manage. If there is a surplus within the funds of the GDP it is removed from the national debt. If there is a deficit, it is added to the national debt. The debt can be reduced through inflation and real growth as the GDP grows. This can still leave large nominal budget deficits with small real deficits. With real growth, the nation can handle more debt so more debt can be incurred. This occurs when the nation becomes financially enriched. The economy of the country has a great effect on many aspects of the lives of its citizens. The U.S.’s deficit, surplus and debt greatly impact each aspect of our everyday lives. It’s something that we have to deal with together as a whole because everyone deals with the effects of it.

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  • University/College: University of Arkansas System

  • Type of paper: Thesis/Dissertation Chapter

  • Date: 24 October 2016

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