1 / 9

Understanding Fiscal Policy and Debt Management in the US Economy

Explore the impact of fiscal policy on the economy, including expansionary and contractionary measures, and how government deficits contribute to national debt. Discover the causes and implications of deficits, national emergencies, and ways the government raises funds to manage debt.

kipling
Télécharger la présentation

Understanding Fiscal Policy and Debt Management in the US Economy

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Chapter 15.1 notes Fiscal Policy

  2. Fiscal Policy • The federal government’s attempt to stabilize the economy through taxing and spending. • Taxing – raising them takes money out of people’s pockets, so they spend less; lowering them allows people to spend more. • Spending – the government can spend money in the economy to help producers and workers, but it can cause higher deficits.

  3. Expansionary Fiscal Policy • Plan to increase Aggregate Demand and stimulate the economy = increase spending and decrease taxes

  4. Contractionary Fiscal Policy • Plan to decrease AD so that inflation is reduced (economy growing too rapidly) = increase taxes, decrease spending

  5. How has this affected us recently? • During recession, gov’t dramatically increased spending and reduced taxes… causing HUGE deficits • Which is very much political – now must find a way to close gap

  6. Chapter 15.3 notes Debt vs. Deficit

  7. Deficit vs. Debt • Budget Deficit – gov’t overspends based on a year – contribute to national DEBT • Budget Surplus – gov’t takes in more than it spends • National debt – total amount gov’t owes • How much is it? • http://www.usdebtclock.org/

  8. Causes of deficits • National emergencies – wars, weather events, etc. • Need for public goods and services – roads, flood control, etc. • Stabilization of the economy – creating projects to give jobs, help economy • Help society – S.S., Medicare, Medicaid, unemployment

  9. How does gov’t get extra $? • Gov’t savings bonds and treasuries • People, state and local gov’ts, financial institutions, etc hold these bonds • Foreign gov’ts also invest – China and Japan have largest amount by foreigners • Majority is owed to Americans and parts of the gov’t

More Related