...Fiscal Policy ECO372 August 14, 2012 Fiscal Policy Introduction Depending on whether a country is running a deficit, a surplus, or a debt, businesses and individuals are affected differently. “The most important budget in the world is that of the United States government. The U.S. budget impacts not only the United States of America but foreign investment, trade, and the economies of nations throughout the world.” (Boothe, 2003) The objective of this paper is to provide examples of how the United State’s deficits, surpluses, and debt affect individuals and business both domestically and internationally. Deficits, Surpluses and Debt; an Overview Summary measures of a budget are denoted by deficits and surpluses. Whereas a deficit is a shortfall of revenues under payments, a surplus is an excess of revenues over payments. Debt is accumulated deficits less accumulated surpluses (Colander, 2010). These summary measures indicate the health of an economy. This indicator helps both domestic and foreign companies determine if it is beneficial to invest in United States assets. Heading into the year 2000, the United States was running a surplus. This quickly changed as the government invested in The War on Terrorism, consumers changed spending habits, unemployment rose, and growth decreased. To increase the money supply, government implemented monetary policy and to get the economy moving again, implemented fiscal policies. These policies have wiped out the surpluses...
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...| The Effects of Running a Surplus or Deficit Budget | ECO 372 | The current state of America’s fiscal policy is of major concern for the majority of the populace with the constantly increase of health care, gas, home interest rates, and staggering unemployment number, some are wondering if this nation will survive. Even many fiscal experts are forecasting that The United States is on road to fiscal disaster which seems to confirm the fears of the nation. Compounding the problems is an elderly populace and increasing deficit problem, a growing segment of government spending apportioned to interest expenditures and entitlements for the upcoming years resulting in plunging government's prolific investments and pushing out private shares. The deliberation of this paper is centered on how and why the U.S.’s deficit, surplus, and debt influences on the taxpayers, impending social security and Medicare users, the unemployed, University of Phoenix students, America’s financial reputation on a global scale, national (export) automotive manufacturer, Import of Italian clothing company, and gross domestic product (GDP). The near term objectives of the paper to convey information as complete glaze of US fiscal policy and how the current fiscal policy influences the nation. American taxpayers play a major role in the economy; this is why there is so much commotion about the millions of immigrants who do not pay taxes. The role of a taxpayer and the role of the economy go hand...
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...Fiscal Policy and Social Security Policy During the 1990s Douglas W. Elmendorf Federal Reserve Board Jeffrey B. Liebman Harvard University and NBER David W. Wilcox Federal Reserve Board Revised July 2001 This paper was presented at a conference on “American Economic Policy in the 1990s” held June 27 to 30, 2001 at the John F. Kennedy School of Government, Harvard University. The views expressed in this paper are those of the authors and are not necessarily shared by any of the institutions with which they are affiliated. We thank Al Davis, Peter Diamond, Edward Gramlich, Peter Orszag, Gene Sperling, and Lawrence Summers for comments on an earlier draft. Elmendorf was formerly Deputy Assistant Secretary of the Treasury in the Office of Economic Policy, and prior to that Senior Economist at the Council of Economic Advisers; Liebman was formerly Special Assistant to the President for Economic Policy at the National Economic Council; and Wilcox was formerly Assistant Secretary of the Treasury for Economic Policy. Table of Contents Page 1. Introduction 2. Budget Outcomes and Projections Improved Budget Picture Sources of Improvement 3. Budget Deficit Reduction: 1990 through 1997 OBRA90 OBRA93 What Did Deficit Reduction Ultimately Accomplish? The Republican-Controlled Congress BBA97 4. Entitlement Reform and Saving Social Security First Entitlement Commissions Social Security Saving Social Security First 5. Social Security Reform Options Using Projected Budget Surpluses as Part...
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...Fiscal Policy Paper ECO 372 Fiscal Policy Paper Learning Team discusses about how and why the U.S.'s deficit, surplus, and debt have an effect on taxpayers, future Social Security users, and Medicare users. A deficit is an excess of expenditures over revenue. A surplus is an excess of revenues over payments. Debt is the amount owed by the government. The team also notes that the U.S. national debt may break 18 trillion before the end of this year from observing the U.S. Debt Clock.org (n.d.). The summary from the discussions is briefed within this paper. Taxpayers When the government is in debt, taxpayers can bear the burden, often normally in an external debt position, where the government owes foreign countries. With high debt, taxpayers will likely have to pay more taxes on their wages to offset the debt. When they do, it will become a surplus and taxes can go down again. However, even if there is a high debt, but there is also a large surplus, there can still be room for lower taxes. High taxes are never what the people want to see but can be a necessity to keep the economy flourishing. Future Social Security and Medicare users Once upon a time, it was normal to expect when one would receive Social Security or rest knowing one could apply for Medicare to participate in government funded medical. Thanks to the nation’s huge debt, largely contributed by President Obama, people are no longer certain about these programs. The future of these government expenditures...
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...Fiscal Policy Laura Wall, Melinda King, ECO/372 April 27, 2015 Sam Pirnazar Fiscal Policy There are many different policies that the government must oversee. One of those types policies is referred to as fiscal policy. Fiscal policy is a set of conscious decisions to make intentional alterations to taxes and government spending (Colander,2013). The purpose of these tactics is to either stimulate or slow down the government (Colander,2013). These policies directly impact tax payers and future social security and Medicare users because they create a deficit, surplus, and debt. The purpose of this paper is to discuss how this deficit, surplus, and national debt affect all have impacts on these citizens. To understand how a deficit, surplus, and national debt affect the economy, it is important to understand what each term means. First there is a deficit which is a lack of funding to cover a cost. A surplus is just the opposite of a deficit. An extra fund left over after the cost of something is paid for in full is called a surplus. Any long term running deficits, in actual currency terms, is considered debt. The United States (U.S.) has accumulated a large amount of debt, increasing its deficit more every year. Surprisingly, national debt has plagued us since George Washington’s presidency, a whopping $75,463,476.52 in 1791 (Steinbring, J., 2011). The U.S. deficit leaves very little in terms of money flow for the government. When deficits are...
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...Fiscal Policy Caroline Evans, Thomas Hughes and George Warren ECO/372 June 5, 2014 Brian Preslopsky Fiscal Policy The United States deficits, surpluses and debts are based on the economic potential output and perceptions. The fiscal policy relates to the tax and spending polices of the federal government. The deficits, surpluses and debt do impact the economy. Oddly to say when consumers, government, and companies spend excessively it helps the economy but often times the money is not physically accounting for before spending so it is vital to understand the deficits, surpluses, and debt which could impact the nature of the economy, our people, expenditures and government. “The economic effect of government debt depends heavily on how taxpayers perceive those future taxes. Perceptions are difficult to measure, and neither economists nor others understand exactly how people form their perceptions”. (www.econlib.org) Needless to say that our federal government has the final decision making if the economy will result to a recession or surplus. This is why it is imperative to understand how the economy is operating and what fiscal policy it is operating under. This paper will explain how and why the U.S. deficits, debts and surpluses have an effect on the economy and will also have an impact taxpayer, unemployed individual, college students, future Social Security and Medicare user, The U. S. financial reputation on an international level, domestic automotive...
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...Week 7 – Webliography Contribution Reforming Medicare in the age of Deficit Reduction Date: 04/16/2014 Webliography Contribution Entry / Reference 1: Urban Institute (2013). Can Medicare Be Preserved While Reducing the Deficit? Timely Analysis of Immediate Health Policy Issues. Retrieved from: http://www.rwjf.org/content/dam/farm/reports/issue_briefs/2013/rwjf404766/subassets/rwjf404766_1 This reference help the current healthcare insurance and managed healthcare issues to reach the right set of policy to make changes that could correct long-standing gaps in financial protections that Medicare beneficiaries face, promote greater efficiency within payment systems, and generate the additional revenues necessary to pay for the impending surge in the number of beneficiaries. Entry / Reference 2: Steckenride, Janie, Parrott, Tonya (1998). New Directions in Old-Age Policies. The Health Care Policies and Older Americans. Retrieved from: http://books.google.ae/books?id=rwR4rpIrvW0C&pg=PA19&lpg=PA19&dq=Reforming+Medicare+in+the+age+of+Deficit+Reduction&source=bl&ots=ZtGKc36-o3&sig=00b8wDb48nxaR4uqWAHTms1slBU&hl=en&sa=X&ei=SKgJU77mK8eb0QW-44C4AQ&ved=0CDUQ6AEwAjgU#v=onepage&q=Reforming%20Med&f=false This reference help the current healthcare insurance and managed healthcare issues to explores the changed political environment in the United States and what it means for the policies and programs benefiting the elderly and their...
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...1 2 >> Fiscal Policy A BRIDGE TO PROSPERITY? I n 1998 the Japanese government though on a smaller scale. Indeed, many completed the longest suspension countries attempt to manage aggregate de- bridge in the world. The 6,500-foot mand by using discretionary fiscal policy. span linking Awaji Island to the city of Governments also adjust taxes in an at- Kobe cost $7.3 billion to build. Yet as skep- tempt to manage aggregate demand. They tics had predicted, it currently carries very may reduce taxes to try to stimulate the little traffic—about 4,000 cars a day. By economy or raise taxes when they believe comparison, America’s longest suspension that aggregate demand is too high. bridge, the Verrazano Bridge that links New In this chapter, we will learn how discre- York City’s Staten Island to the borough of tionary fiscal policy fits into the model of Brooklyn, carries more than 300,000 cars short-run fluctuations we developed in each day. Chapter 10. We’ll see how deliberate In Japan, stories like this are common. During the 1990s the Japanese government What you will learn in this chapter: changes in government spending and tax policy affect real GDP. We’ll also see how ® What fiscal policy is and why it is an important tool in managing economic fluctuations ® Which policies constitute an expansionary fiscal policy and which constitute a contractionary fiscal policy ® Why...
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...Learning Team “A” Fiscal Policy Paper Ronnie Banks, Leona Burleson, Desiree Macias, Joshua Martinez, Martha Miranda, and Liliana Puentes ECO/372 February 6th ‘13 Moises Rodriguez Abstract The central thesis of this paper is to address the main ideas of how and why the United State’s deficit, surplus and debt have an effect on today’s current events. This paper, will discuss the effects from taxpayer’s, future social security and Medicare users. Also, the unemployed individuals, even our fellow University of Phoenix peers have part in today’s politics. This essay will address the United State’s financial reputation on an international level, a domestic automotive manufacturing, and an Italian clothing company, and the importance behind the Gross Domestic Product (GDP). Fiscal Policy Economics is a daily issue that concerns personal and business financial activity. The United States is known as one of the strongest financial countries. It is complicated to understand how the United States deficit, surplus, and debt can affect the population economy. The economy can affect different areas and individuals, such as taxpayers, unemployment individuals, GDP, importer and exporter companies, college students, social security and Medicare users. The economic is not affecting only the present but will influence in the future financial activity. Unemployed individuals A deficit is a loss under payments and surplus is the excess over payments...
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...spending on health care has been the subject of discussion and scrutiny for several decades. The enactment of the Patient Protection and Affordable Care Act of 2010 (ACA) was hardly the first fiscal policy for healthcare in the history of the economy. There is a long list of fiscal policy attempts from predecessors such as Franklin Roosevelt, Harry Truman, Richard Nixon and most recently Bill Clinton (Sparer, p462). In 1933, Franklin D. Roosevelt drafted amended provisions to his pending Social Security legislation to include publicly funded health care programs but ultimately removed the provisions due to opposition by the American Medical Association (Coombs, p5). Following the Second World War, President Harry Truman called for universal health care as a part of his Fair Deal in 1949 but strong opposition stopped that part of the Fair Deal (Peon, p161-168). On July 30, 1965 President Lyndon B. Johnson signed into law the legislation establishing the Medicare and Medicaid program, social insurance programs administered by the United Stated government providing health insurance coverage to people who are either 65 or meet other special criteria for need (Roemer, p845). In October 1972, President Richard Nixon signed the Social Security Administration Amendments of 1972 which extended Medicare to those under 65 who have been severely disabled for over two years (Ball). The 1980’s saw the passage of The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) signed by...
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...Fiscal Policy ECO/372 June 1, 2015 Alan Beideck Fiscal Policy The United States deficit, surplus, and debt influences the economy in a number of ways, and it creates an impact on taxpayers, social security and Medicare users, unemployed workers, and students. These issues also affect the countries financial reputation, exports, imports and the Gross Domestic Product (GDP). The U.S. economy is experiencing a budget deficit and outstanding debt, and the outlook is not good for taxpayers. If these two items do not get under control, future generations will be left to pick up the pieces and will have to try to find a way to maintain and control the budget. Taxpayers Taxpayers are the people that pay and contribute to state revenue. Government deficits affect taxpayers by increasing taxes and interest. "Inflation also affects the deficits by affecting the size of social security payments, federal pension payments, and interest on the federal debt. The deficit and surplus are sensitive to the business cycle" (Deficits, Surpluses, And Debt, 2015). "If the government use surplus it would "give tax cuts to taxpayers, increase income transfers, pay down national debt and spend it on goods and services" (Deficits, Surpluses, And Debt, 2015). Future Social Security and Medicare users The Social Security program began in 1935 and benefits have always been paid on time, even with modified laws over the years. Benefits are expected to continue to be paid on time through...
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...controversies and made over 60,000 members leave AARP. Also another issue would be that in the 1980s, AARP came under scrutiny of Republican Senator Alan Simpson. Simpson believed that AARP was abusing its status as a non-profit organization and was being run to make money for then leader Leonard Davis. The investigation found no evidence of wrong doing on the part of Davis or the AARP and the matter was dropped. AARP’s political ideology would lean conservative to moderate, 38% conservative, 39% moderate, and the other 15% would be liberal. I believe that AARP contributed heavily to the democrat party. They came out in support of the health care bill, this was to ensure that they would continue to enroll seniors into their supplemental Medicare insurance. In fact, the health care bill will increase this enrollment because the public insurance sector will be unable to provide it due to the cost increase. In this article AARP talks about how it announced its first foray into mobile content with the debut of four new digital apps. The new AARP app for iPhone and iPod touch enables AARP members to carry a digital version of their membership card, allowing them easier access to member benefits, activities and programs. AARP is also introducing three separate apps for AARP The Magazine, AARP Bulletin and AARP VIVA that will be available for iPad, iPhone and iPod touch users. “We know the 50+ audience is one of the fastest growing segments using mobile devices, and our new apps...
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...Summary: This article talked about the fiscal policy. The health-care was one of the big issues that affected our fiscal future. We were going to reform our health-care system. Also, we needed to undertake comprehensive health-care reform, so it improved efficiency and increases value. Critical Analysis: The health-care costs had been a big issue of our fiscal policy. The Medicare and Social Security trustees' reports showed that the health cost would be a problem for the long-term entitlement. For example, if the health-care costs kept growing at the same rate over the next four decades, the Medicare and Medicaid would be increase from 5% of GDP today to 20% by 2050. From 5% to 20%, it would be a big jump. Also, there were many baby bomber still benefited by the government. The baby bomber is the larger than expected generation in United States born shortly after World War II. As they were getting old, they started to retire. They also got the Medicare from the government. It might be a big problem after twenty years. I was afraid that it might not have enough health-care’s budgets for the next generation. However, the government might have to cut the budgets from health-care without reducing the quality. The administration had a plan that took four key steps. Those four steps: 1) health information technology, because we can't improve what we don't measure; 2) more research into what works and what doesn't, so doctors don't recommend treatments that don't improve health; 3)...
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...Fiscal Policy The status of the United States has an effect on society. The U.S. deficit, surplus, and debt affect society in many ways. One does not take the time to see the impact it has on civilization. The status of the United States has an impact on tax payers, future Social Security and Medicare users, unemployed individuals, students, exporters, importers, and most of all, the country’s Gross Domestic Product. In the following, the team will discuss how the U.S. deficit, surplus, and debt affect society, not only in the United States, but also around the world. Tax Payers The influence of fiscal policy changes scheduled to occur at the end of 2012 can poses serious challenges for tax payers. One area where high tax payers are disagreeing is the increase in tax rates resulting part due to the 2001 and 2003 tax cuts. President Obama has asked for the reinstatement of the higher top tax rates in his budget submission to the Congress. The increase in the Medicare tax and its expansion to unearned income for high income earners under the Patient Protection and Affordable Care Act of 2010 also contributes to the increase in top tax rates. The concern over the top individual tax rates has been a focus because of the special role played by flow-through businesses like S corporations, partnerships, limited liability companies, and sole proprietorships. These businesses employ 54% of the private sector workforce and pay 44% of the federal income taxes. Higher taxes result...
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...Fiscal Policy Paper Deficit can affect multitudes while a surplus creates positive results for those on the receiving end. A debt requires the liability to be paid or the liability may be repossessed or rendered bad credit to the individual. While Americans face issues with debt, surplus, and even deficit it is important to know that the United States deals with it first hand as well. Several areas the three topics affect include tax payers, unemployed, Social Security, Medicare, imports, exports, and the GDP. A synopsis of Team B’s discussion of the topics follows. Tax Payers Taxes are imposed on the United States by three categories; federal, state, and local government. Tax payers are taxed on their income, payroll, property, sales, imports, estates and gifts, as well as various fees. Tax payers are required to file tax returns whether it be for a business, corporation, or individual. Tax payers are affected by the U.S. deficit when there is a shortfall in revenue which is the result from the National Debt increasing. Additionally when there is a surplus tax payers are affected as well. Future Social Security and Medicare Users Social Security Administration figures that by the year 2040 the SS trust fund will be used up causing utilizing one of three options: borrowing, increasing revenue, or lowering benefits. The Medicare program is estimated to be much closer to crisis than the SS trust fund. In contrast to current Medicare and Social Security benefits budget...
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