Fiscal Policy of India from 1991 to 2011

The United States deficit, surplus, and debt will always have an impact on taxpayers. In the state of high deficit the government seeks ways to cut and save money for debt payment. The government does this by pulling funding from programs that have little government impact. Increasing taxes also supplies the government with extra income. In addition to the reduction or elimination of certain tax credits, the government analyzes school funding for cost effectiveness. Each step the government takes has a trickling effect on taxpayer’s dollar.

“I am not a crook” said President Nixon. When President Nixon said this, he was talking about The Watergate. The Watergate was one of the biggest scandals and was also another example of presidents using their power for evil. The Watergate was when President Nixon broke laws The Watergate was significant because it was a big part of our history and it changed many lives for better and worse.

The Atomic Era, spanning from 1945 through the 1960s, was a source of immense concern and fear that faced both Americans and the entire world. During this tumultuous time in history, past abominations such as the Depression and two deadly World Wars haunted Americans, while the Cold War loomed as an imminent threat. Due to such prolonged suffering, the human spirit holding people together the world over had fallen apart at the seams. Upon receiving the Nobel Prize in Literature in 1950, William Faulkner delivered an acceptance speech in which he applies balanced sentences, meaningful repetition, and potent hyperbole in order to call aspiring writers to abandon their fears and encourage them to create work that will aid the world in midst of the current, volatile Atomic Age.

3. The deficit was finally brought under control in the late 1990s, through increased taxes, reduced expenditures - especially on defense - and a strong economy.

During the 1980’s and 1990’s, state and local governments saw a long period of fiscal stability in which revenues and expenditures stayed steady and predictable. With the dawn of a new century, Fisher (2003, p. 9), questioned if state and local government analysts and leaders would see a continuation of fiscal stability or a return to the previous dramatic instability of earlier decades. The circumstances that could affect stability, or changes in revenue and spending, are economic growth, demographics, public facilities and infrastructure.

Deficit spending generates the creation of wealth transfers from future taxpayers to future government shareholders. In the near future our children and future generations will have a portion of their personal earned incomes moved through higher tax rates compared to those who carry Treasury notes. Government debt causes our children to loose more rights and freedom. Deficit spending is very underhanded because it causes people o believe they are gaining something for nothing. In actuality, their personal wealth is reduced and gives the illusion that their money was covered by taxation. Information involving the overall cost is not even stated in the tax bill itself. Politicians tend to support deficit spending because it rewards special-interest groups and enlarges the state’s control of its private sector (Gwartney et al. 110). Without proper laws and restraints, legislators will drive up budget deficits and spend funds excessively (Gwartney et al. 110). When the government’s allocation of money exceeds its total revenue, a budget deficit occurs.

December 2007, a recession happened again in the United States; this lasted until June 2009. In between the years of 1948 to 2011, there have been 10 recessions total.(U.S. Bureau of Labor Statistics, 2012) The government used a policy called the Fiscal policy which was a starting point of the recovery after the most current recession in 2007. The fiscal policy includes government spending, taxation, and other factors that influence the economy. President Obama was trying to increase aggregate demand by using the Fiscal policy. Aggregate demand is a relationship between the price level and the output of goods as well as services.

Expansionary fiscal policy results in a reduction of taxes and increased government spending and therefore increasing the demand level in an economy. The institution of expansionary fiscal policy raises disposable income through reduction of taxes in the economy and this improves the rate of consumption. Therefore, tax reduction is an appropriate expansionary fiscal policy that can be deployed to help an economy that could be undergoing a recession (DeLong & Summers, 2012). Consequently, tax reduction could be a vital government tool for increasing the Gross Domestic Product. Low taxes encourage individuals to work hard and thus boosting the county’s GDP.

Automatic stabilisers are changes in tax revenue and government spending that occur automatically in response to changes in the level of real GDP. Government use taxes (personal and corporate) and spending on public welfare to help to monitor fluctuations in economic conditions. A good example of an automatic stabilizer is unemployment benefits. When the economy slows down and people are put out of work, these benefits work to stabilize things without government intervention to the economy. A budget surplus slow down an expanding economy and a budget deficit mitigate a downturn in the economy (less revenue and increase government spending).

Fiscal policies, if used efficiently, can be extremely effective and helpful to the economy. However, many pros and cons are tied to this method. Firstly, fiscal policies can be effective because they can focus spending to precise purposes.1 Therefore, the money that the government spends can be used on the things that would benefit the economy the most. Additionally, the government can reduce negative externalities with the use of taxes.1 An example of this would be taxing things that have a negative impact on the environment, such as companies producing an immense amount of pollution.1 Additionally, the government can also tax companies that are using too much of a limited resource.1 By doing this, the government not only can use the money gained from taxing to help the economy, but they would be reducing externalities such as these in order to help the country. Lastly, the effects of a fiscal period are much more immediate and quicker in comparison to a monetary policy,1 This means that the recessionary

Shah, A. (1998). Fiscal federalism and macroeconomic governance: For better or for worse? (Vol. 2005). World Bank Publications.

For the first time in 50 years, a tax bill passed that granted larger cuts to the wealthy and business owners in hopes to stimulate savings, growth, and investment that will help everyone else. This bill wiped out several years of revenues ($150 billion/year) traditionally used for incremental program increases and deficit reduction. In 1983, the President has able to regain deferral spending powers taken away by a provision in the 1974 Act. This provision was negating by the Supreme Court an unconstitutional on the grounds of violating the separation of powers (Wildavsky et al., 2004, p. 90).

Fiscal policy is a system used for the economy that helps the fluctuation of financial goals by the alterations of government expenditures or taxes. There are two different fiscal policies used debating on the growth or decline of the economy. First is expansionary fiscal policy that is used to help boost the economy when it is in a decline like the recession our nation just witnessed along with prior years. Which in this case the government can decrease interest rates, and use tax incentives to help boost the financial system and private spending. Second is contractionary fiscal policy that is put into effect when the economy is at an incline and possible inflation is taking place. In which instead of decreasing interest rates they could raise

Perspectives among economists on the usefulness of fiscal policy as a device for macroeconomic management have moved back and forth over the years. Belief in the active use of the tools of fiscal policy may have reached a relative peak sometime during the 1960s or early 1970s, and practice followed theory. In the United States,

It's difficult to pin down a reason why I chose cartooning for a career. Even piecing together a series of events is tough for me to decipher. Like many artists I have been drawing since I could pick up a pencil, but that's hardly a reason for me to pursue art as a profession. After all, art isn't as simple as some may say it is. Getting a steady job that pays well isn't a given for artists. All artists spend their entire lives working and learning in order to improve their craft, and even then I doubt that there's an artist out there that's completely satisfied with their work. It's strenuous work, and there's hundreds of other people out there competing in the same market. What could ever compel a person to willingly enter a market like that?