Question

Fiscal constraints play a huge role in how cities and municipalities are ran. Pros and cons

Answer 1

Measures implemented by governments in relation to the collection of revenue and public expenditure are commonly referred to as fiscal policies. These policy measures can normally be categorized as either expansionary or contractionary and some politicians tend to favor one of these approaches regardless of the state of the economy.

Fiscal constraint is A demonstration of sufficient funds (Federal, State, local, and private) to implement proposed transportation system improvements, as well as to operate and maintain the entire system, through the comparison of revenues and costs.

Pros:

Unemployment Reduction – When unemployment is high, the government can employ an expansionary fiscal policy. This involves increasing spending or purchases and lowering taxes

Budget Deficit Reduction - A country has a budget deficit when its expenditures exceeds revenue. Since the economic effects of this deficit include increased public debt, the country then can pursue a contraction fiscal policy

Economic Growth Increase - The various fiscal measures a country employs facilitate expansion of the national economy. For example, when the government reduces tax rates, businesses and individuals will have a greater incentive to invest and steer the economy forward.

Cons:

Conflict of Objectives -- When the government uses a mix of expansionary and contractionary fiscal policy, a conflict of objectives can occur.

Inflexibility - There are usually delays in the implementation of fiscal policy, because some proposed measures may have to go through legislative processes.