DR. DICK'S - WWW.USAFISCALPOLICY.COM
USA FISCAL POLICY - THE NATION'S CHECKBOOK
HOW TAXATION AND SPENDING AFFECT YOUR WALLET
DR. DICK'S - WWW.USAFISCALPOLICY.COM
USA FISCAL POLICY - THE NATION'S CHECKBOOK
HOW TAXATION AND SPENDING AFFECT YOUR WALLET
About
What is Fiscal Policy?
Government spending policies that influence macroeconomic conditions. Through fiscal policy, regulators attempt to improve unemployment rates, control inflation, stabilize business cycles and influence interest rates to control the economy. Fiscal policy is largely based on the ideas of British economist John Maynard Keynes (1883–1946), who believed governments could change economic performance by adjusting tax rates and government spending.
Keynesian Theory
Keynes promoted the use of fiscal policy to affect the economy, consider an economy that is experiencing a recession. The government might lower tax rates to try to fuel economic growth. If people are paying less in taxes, they have more money to spend or invest. Increased consumer spending or investment could improve economic growth. Regulators do not want to see too great of a spending increase though, as this could increase inflation.
Another possibility is that the government might decide to increase its own spending – say, by building more highways. The idea is that the additional government spending creates jobs and lowers the unemployment rate. Some economists, however, dispute the notion that governments can create jobs, because government obtains all of its money from taxation – in other words, from the productive activities of the private sector.
Dr. Dick
- My name is Dr. Dick Bridy, and I am committed to educating and communicating with the public on the simplicity and complexity of US Fiscal Policy. In economics and political science, fiscal policy is the use of government revenue collection (mainly taxes) and expenditure (spending) to influence the national economy. The United States uses fiscal policy to influence the level of aggregate demand in the economy, to achieve economic objectives of price stability, full employment, and economic growth. I am a Conservative Keynesian, who believes that targeted government spending, when no other alternative is viable, is the key to aggressively stimulate aggregate demand, increase consumer spending, combined with moderately decreased taxes as the immediate prescription to combat imminent recession. My Conservative Keynesian philosophy argues that this method must be used with extreme caution in times of economic peril as a tool for establishing the foundation for strong economic growth and full employment.