Fiscal Policy at the Federal Government Level

Fiscal Policy
1. Discuss three (3) things you learned from the lecture
From the Budget and Economic Outlook of years 2010 to 2020, we learn that even though the 2009 deficit was higher, the country was likely to encounter a slightly lower deficit if current laws and policies remain unchanged. Furthermore, the 2009 budget deficit was the largest in history, since the end of the Second World War. The 2010 budget would rank second. The Congressional Budget Committee attributes this to elevated spending, yet the revenue collected is less resulting in an imbalance. This shows that the country’s budget is performing poorly recently as compared to the past. Legislation that minimizes spending and boosts n the revenue to save this situation need to be enacted rapidly, It is because of the imbalance between the revenues and spending that projects a recession and a shakeup in financial markets. Failure to this, the country is likely to witness even a greater deficit which would be worse compared to the one in the fiscal year 2009. This would result in reduced family spending constrained on income, skyrocketing external debts, loss of wealth, and a slower investment.
The lecture on the hard road to fiscal responsibility elucidates that the country is heading to a severe debt crisis. This is similar to one afflicting the countries in Southern Europe. To save itself from this, several fiscal policies should b put into place, which includes ways to minimize spending while increasing the revenue collection. There are also several options available for stabilizing the debt-GDP ratio are which are put forward, including the proposals of the President’s National Commission on Fiscal Responsibility and Reform and the Bipartisan Policy Center’s Deficit Reduction Task Force.

2. Discuss three (3) things from the lecture that need to be explained in more detail
From the lecture on Government Fiscal policies, even though there are measures to stabilize the economy, it is not clear on how this plan would be put into action. Additionally, the authors do not fully exhaust the possible ways of increasing revenue and minimizing the expenditure. Corruption is one of the ways that disrupt a budget since funds are misappropriated and used for unintended purposes. The ways of fighting this vice are not clearly explained in the lecture. Finally, the impact on the plan to a stable economy has not explained its implications on the American people. Raising taxes to improve economic growth would overburden citizens making their lives even harder.
3. Explain how fiscal policies from the federal level of government impact state government? How do they affect local government?
The deficit does not only influence the federal government but the State and the Local Government as well. It results from excessive spending on inadequate revenue. The Federal Government allocates budgetary resources to both the Sate and the local government. In a case of deficits in the federal government, the local and the state government will equally be affected as they will be forced to cut their spending. This will lead to constraints in a provision of services to the citizens.( McEachern & William, 46).

• Write journal entries in complete sentences
Budgetary deficits are brought about by improper use of resources allocated. Therefore, there is a need to increase further on ways of creating revenue apart from relying on taxes alone. According to Tucker & Irvin, (341), measures should be put in place to ensure that there is no wastage of public resources through corruption. Harsh penalties on corrupt individuals to ensure that government officials do not steal public funds should be put in place. The federal government should also avoid unnecessary expenditures that are not budgeted for to avoid over borrowing, which escalates the national debt.

REFERENCES
McEachern, William A. Econ Macroeconomics. , 2014. Print.
Tucker, Irvin B. Macroeconomics for Today. Mason, OH: South-Western Cengage Learning, 2010. Print.