Question

Describe the recent 10 year history of Fiscal Policy in the United States?
Must be 250 words and nonplagarized material please

Answer 1

Describe the recent 10 year history of Fiscal Policy in the United States?

Fiscal policy is a tool used by government either by changing government spending or the levels of taxation. Government has to opt for fiscal policy as it helps in preventing economic crisis. Due to recession and financial crisis, most of the economists embraced government spending which is a tool of fiscal policy for economic growth and bring stability in the economy. The argument exists on which tool to use for economy’s betterment. Most of the economists squabble about government spending being better tool than tax cut during recession times.

The recent trends in U.S. fiscal policy are a result of great depressions. GDP was estimated nearly 17.5 percent before the great recession. Tax revenues significantly reduced after two recent recessions, i.e; 2001 and 2009. Due to reduction in taxes in 2013, GDP was expected to reach at 18.1 by the next decade.

Fiscal policy is going to provide a big boost to US government in order to enhance the economic stability. The policy is mainly contributing towards defence sector and infrastructural spending from government funds. The United States economy is boosting with nearly 3 percent by the end of 2019 creating an inflationary pressure which will lead t result in rate of interest in the economy. The government deficits will be more due to high government spending on infrastructure and defence.

The Federal government is expecting a sharp hike in interest rates if wage rate and inflation expansion takes off.