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Date Submitted: 05/18/2014 07:30 PM
Team C Fiscal Policy Paper
Jacqueline Murphy Nester, Kimberly O'Neal, and Cathi Stark
ECO/372
April 14, 2014
James Kirk
Team C Fiscal Policy Paper
Introduction
The U.S. Fiscal policies are measure put into place to help stabilize the economy. The fiscal policy that is implemented is determined by the U.S. deficit, surplus, and the government debt. All of these factors affect economic growth. This paper will discuss how these policies affect tax payers, the future of Social Security and Medicare users, unemployed individuals, and university of phoenix students. It will also discuss how these factors affect the United States reputation on an international level, domestic automotive manufacturing (exports), and imports of clothing from Italy. Lastly explain how the deficit, surplus, and debt affect the GDP.
Tax payers
The budget and national debt in the United States affect tax payers. A deficit means taxpayers will see higher taxes and interest rates to decrease the government deficit. A surplus would lower taxes and interest rates. "Income taxes will automatically decrease during a recession and increase during an expansion" ("Chapter 12: Deficits, Surpluses, And Debt", n.d.). The national debt affects taxpayers, if not brought under control taxpayers will see spikes in taxes, and interest rates will be very high.
Future Social Security and Medicare users
Future Social Security and Medicare users are affected by the budget of the America. These programs are run from trust funds. According to Goss (2010)
Trust Funds have the important features that benefits can only be paid to the extent that the trust funds actually have assets to draw on to pay the benefits. Unlike the rest of federal government operations, these three trust fund programs do not have the ability to borrow in Order to continue paying benefits when the dedicated taxes and trust fund reserves are not sufficient. (para.9)
This means there could be numerous benefit payments canceled....