Bush Tax Cuts

752 Words4 Pages
CASE STUDY BARACK OBAMA AND THE BUSH TAX CUTS 1. Were the Bush tax cuts of 2001-2003 and 2008 a good idea given the information available at the time? Identify the pros and cons of those tax cuts We find two interpretations for the Clinton Boom by the two political parties in USA. The democrats consider that the boom was caused by the increased in the taxes on most successful individuals that led to a reduction in the deficit meanwhile the republicans considered that it was due to reduction of taxes and deregulation. The central banks, the Fed in USA and the ECB in the European Union, used following tools to deal with the Credit Crisis. These different ideas are related to the incoming policies taken in these…show more content…
Increase taxes over the wealthiest and reduced the taxes over the less wealthy individuals trying to get a more progressive model. These measures would affect in the short-run the aggregate demand for good and services, stimulating consumer spending, earnings and profit rise. This effect will depend on the multiplier effect and the crowding-out 3. What economic policies should the US Federal Government pursue over the next decade? We would consider the following fiscal policies: * Reduction of defense expenditure. Taking a look at Exhibit 7 we see that this % has been rising in the last 13 years. Try to reduce this % increasing the exports of defense material to its allies. USA should try to reduce the amount of money spent in defense selling more material to the allies that would be considered as exports helping the trade balance. * Promote middle class. Reduce taxes in order to promote middle class and lower income individuals making the system more progressive like in the Scandinavian countries. To continue using the measure thanks to which USA demands to the international banks to send information about the accounts these have in their banks, fining them in case they do not send it. * Incentives to saving or invest rather than to
Open Document