Monetary/fiscal Policy :: essays research papers

Monetary/Fiscal PolicyGovernment monetary and fiscal policies change solely the time. These policies beinstalled or fixed for the betterment of trade, inflation, unemployment, thebudget, or many other economic factors. In my opinion, it seems like two peoplehave the majority of the run when it comes to forming these policies. Thefirst person who influences these policies is President Bill Clinton whoproposes tax cuts, to residual the budget (Clintons budget proposal should begiven to congress soon), minimum wage increases, or other legislation to improvethe economy. The second person who influences policy is the Federal ReserveBoard Chairman Alan Greenspan who can truly destroy our economy by a slightmiscalculation. Greenspan is so influential that the mere speculation of hismaking a move can cause panic buying or merchandising in the open markets. AlanGreenspan has the power to increase or decrease the money supply by changingreserve requirements, by changing the discount rate, or by buying or selling U.S.Securities over the open market.The major governmental problem is trying to balance the budget. The UnitedStates government is currently in debt $5,262,697,717,000 as of February 7. Thisnumber grows about $10,000 per second(see charts 2,3,and 7). President Clinton,Chairman Greenspan, and Congress are all working towards a balanced budget bythe year 2002. As many economists explain , the need is for legislation to keepthe budget balanced for years to come and not look for a quick fix to balancethe budget for only a few months to quiet critics. The government takes stepsconstantly to balance the budget economists say that the chances of inking adeal this year are better than ever.President Clinton has currently proposed an mangleer of $100 billion in tax cutsthrough 2002. These cuts are aimed at giving relief to middle branch citizens.A few of his other proposals include $500.00 child tax credit, tax deductionfor post high school education, increasing th e limits of individual retirementaccounts, and riddance of the capital gains tax. Despite these cuts, hestill believes a balanced budget will be achieved by the year 2002.Greenspan, in an effort to shave billions of dollars off the deficit, explainedto Congress that they are overpaying Social Security recipients. Greenspanstestimony sets the stage to successfully balance the budget. His reasoningbehind these allegations is that the cost of living is overstated and he is urge on Congress to correct the problem which would affect inflation, grossnational product, and the budget.InflationThe fourth quarter results have been calculated and the economy is in greatshape.