Question

Fiscal Policy Actions

This rubric element wants you to examine what the fiscal policy initiatives were going forward, to respond to the changing economic landscape.

•You should specifically state what the intent of the actions were - for instance, it could be to decrease unemployment.

•Then, use our macroeconomic principles and models (like the AD-AS model or Keynesian consumption function) to explain why the action would lead to the outcome desired by the government.

•Keep the main points (and any use of graphs to show the economic models) on the slide and use the speaker notes to add full explanation.

I need the above explained/answered for the period of 1950-1960's. Any help would be appreciated - thanks!

This is for a discussion so can be short response.

Answer 1

Before state debt is reduced, the U.S. federal budget deficit must be eliminated. This means that the U.S. federal government must stop raising debt before it can reduce it. Congress now spends more than $ 1 trillion a year more on tax revenue.

The situation is worse than it sounds. Many federal programs are designed to constantly increase spending. Important examples are Social Security and Medicare. As population and inflation decrease in cost, the program spends more and more every year. Even if the federal government reduced "unnecessary" spending to zero, "restricted" spending programs would result in larger deficits.

All of this leads to obvious impossible problems with costly installation. If there is any way to reduce the national debt by $ 17 billion, the cost should be reduced, not always increased.

Updated 1950-1960

The United States government owns many of the land and minerals associated with that land. If it encourages the development of these minerals, it can increase profits for mineral production. These include abundant oil and natural gas, as well as many valuable minerals.

There are several advantages to this approach, including the enhancement of the trade balance, which has been undermined by heavy imports of crude oil. Unfortunately, there is also a party on the political scene because radical environmentalists will do everything they can to destroy U.S. energy production. This means that in order to develop these resources, there must be a political commitment to ignore environmentalists.