Eco 372: Fiscal Policy

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Fiscal Policy Joshua Canfield, Haeli Abeytia, Nancy Garcia ECO 372 May 1, 2014 Scott Cain Fiscal Policy As time progresses the economy is always changing and evolving. Fiscal Policies are one of the major factors that determine the overall stability of the economy. In order to maintain stability of the global economy the governments need to be involved and aware of the markets and the changes in the global economy. Government programs like medical benefits, social security, and even taxpayers are all effected on decisions the government makes so it is vital that the state of our government is stable to keep our economy in good conditions. In order to understand the effects of taxpayers, unemployment, and individuals on social security and Medicare we need to understand what deficit, surplus, and debt is. A deficit happens when the government’s expenditures exceed…show more content…
Surpluses can reduce taxes which saves taxpayers moneys. This gives taxpayers more savings and also puts more money into the economy in other areas. This will in turn stimulate the economy by causing banks to lend more money and lower interest rates. When there is a deficit taxpayers can feel more hardship due to increase taxes and less money being brought into households. This will cause less money to flow through the economy eventually causing lenders to reduce the amount of loans being given. Taxpayers are not the only ones that can be affected by a surplus, deficit, and debt. Social Security and Medicare recipients can also be greatly affected by changes in the economy. In the past it was safe to assume that an individual would collect social security. Times are changing and some feel that social security might not be around for too much longer. Being in a deficit the government will borrow against surpluses that social security may have. Causing the likely hood of social security running out as predicted in recent
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