Eco 372 - Learning Team - Week 5 - Fiscal Policy Paper

U.S. Fiscal Policy’s Impact

ECO/372

October 13, 2014

Alan Beideck

U.S. Fiscal Policy’s Impact

Learning about the U.S. budget deficits, surpluses and debt can be a revelation to many Americans. For example, there is a tangible relationship between the extent of the deficit and the availability of tax cuts. One will also see that the condition of the budge impacts the ability to administer government programs such as Social Security and Medicare. Of course there is a cyclic nature related to unemployment due to these individuals having less money to spend to help stimulate the economy; this will increase their dependence on government programs. Nations develop relationships based on the condition of their budget. For example Greece is much maligned due to their epic financial collapse. We will also evaluate the relationship between the United States budget and its effect on the GDP.

Future Social Security and Medicare Users

According to "www.ssa.gov" (2010), the U.S. Social Security Administration due to changes made in 1983, benefits are expected to be paid in full until 2037. Each year congress receives a report on the financial status of Social Security and Medicare from the Social Security Board of Trustees. This allows understanding of the program and early detection of possible complications. Social Security and Medicare was equal to 8.4 percent of GDP in 2013.(www.ssa.gov, 2014) Major changes are needed in the program to continue full benefits.

Unemployed Individuals

According to (Colander, 2013, p. 536) in a recession many people are unemployed. To be in a recession there is a drop for two successive quarters of a year in real output. In 2013, the unemployment rate decreased in 43 states decreased for the yearly average. (www.bls.gov, 2014) Unemployment for September 2014 declined to 5.9 percent. Health care, retail trade, business services and professional employment is on the rise. The weekly average for real earnings is...