Fiscal Policy Essay

The linked States impacts various policies not only at home but abroad. It has been a powerhouse for umpteen years, and its strengths and weaknesses impact early(a) countries. The deficit, overindulgence, and debt are three major areas influencing these policies. These three factors lay down a huge impact on m either areas we will discuss. These include taxpayers, the future of accessible Security and Medicare users, the unemployed, a University of genus Phoenix student, the get together States financial reputation on an international level, a municipal automotive manufacturing, or exporter, Italian clothing comp whatsoever, or importer and Gross domestic Product (gross domestic product). Italian Clothing CompanyThe unify States deficit, surplus, and debt play a factor a role in the conduct of business with any Italian clothing company. Italy relies on its manufacturing exports to provide for its economy, and the United States ranks as sensation of one of its prolific ex port partners. According to Economy Watch gist (2010), Italys famous brands such as Armani, Valentino, Versace, and Prada catch created a quoin in the global marketplace where there is a huge engage for high quality and superior goods. According to Colander (2010), the United States has stockpile a trade deficit in the last 40 years. If the U.S. is unable(p) to purchase from Italy, this affects the Italian economy.Financial Reputation of the United States on an global Level The U.S.s deficit, surplus and debt impact the financial reputation of the United States on an international level because these are factors that promote or unwilling economic growth, future prosperity and foreign policy. The United States debt is the largest in the gentleman for a single country, which has cause the financial reputation and credit worthiness of the United States to suffer (Amadeo, 2013).The dollar is considered to be a global currency and the one primarily used in international transa ctions and trade. When foreign investors lose confidence in the U. S. Governments ability to manage the compute and pay come to their debt, they raise interest rates on loans for the added risk. Government isno all-night able to borrow at affordable rates. Demand for investing in U.S. treasuries diminishes, lowering bond ratings and the value of the dollar. When the value of the dollar decreases, the dollar becomes little desirable, and foreign investors get paid back in currency that is worth less, which damages the special role of the dollar and the financial reputation of the United States (Boccia, 2013). Tax PayersTo repay the nations debt budget makers frequently claver the option of higher taxation of the wealthy and businesses. Individuals and Corporations fear this option because staffing and insuring becomes to a greater extent costly hurting the bottom line. A contributing factor to the stream state of the U.S. economy is the gradual tumble in taxes that the wealthy moldiness pay.The U.S. must reduce the deficit or the debt will grow, and could become genuinely costly to taxpayers possibly having to reach in their own pockets to pay sour the debt. When the economy is doing well and the unemployment rates are low, the economy should be in decent standing due to the fact that the newly employed taxpayers have once again began paying into the taxes, but they also are exhilarating the economy by spending their money and paying sales taxes. approaching Social Security & Medicare UsersAccording to the 2010 Trustees Report the programs face massive everlasting annual deficits starting in just five years. Coupled with a Congressional Budget Office report predicting Social Security and Medicare expenditures to augment around 75% by the year 2030, economists seem to have no certain answers now (John, 2010). Social Security and Medicare benefits have their own pecuniary resource so they do not affect one another nor does any other debt affect them. Social funds such as these have their own reinforcement scheme thats not tied to other federal bodies or accounts (Mankiw, 2011). A domestic automotive manufacturing (exporter)The effect that the U.S.s deficit, surplus and debt have on a domestic automotive manufacturing exporter starts with the dusk in auto sales. The deficit in the economy is followed by a decline in spending and lowered auto sales. A decline in auto sales reduces employment due to lower prerequisite and adds to trade deficits. When the U.S. is unable to sell to other countrieswe are forced into a surplus. Businesses fail guide to government bailouts. The government spends money going into debt to hand over these companies. Unemployed IndividualsThe deficit affects unemployed individuals because the people who need support, cannot get it, or cannot get enough to help supplementing their income until they find employment. A surplus provides help with unemployment benefits WIC and other programs. Debt leads to higher taxes, making sustainability difficult for themselves and their families. University of Phoenix StudentThe deficit affects a University of Phoenix student because funding for financial aid could be compromised leading to more private loans. Loans become expensive, costing the student more. The surplus affects a University of Phoenix student by providing additional resources for school funding and programs. Debt means not having enough money to fund schooling leading to higher personal debt. GDPGDP is affected by deficits, levels of debt and budget surpluses. When the U.S. runs a high deficit, debt levels increase putting pressure on economic growth. The Reinhart/Rogoff research concluded that when a countrys gross debt exceeds 90% of GDP, median growth rates fall by one percent, and mean(a) growth falls considerably more (Sahadi, 2013). Budget surpluses impact GDP growth positively by providing additional resources for the government to invest in the countrys economy. Con clusionThe U.S. governments handling of federal budgets affects individuals and businesses alike worldwide from students to major corporations. Deficits lead to debt burdening the economy, negatively impacting nearly any aspect of the financial world. A surplus shows financial responsibility positively affecting the economy and creating prosperity.ReferencesAmadeo, Kimberly (Feb. 2013). What the U.S. Debt Is. Retrieved from http//useconomy.about.com/od/fiscalpolicy/p/US_Debt.htmBoccia, Romina (Feb.2013). How the United States High Debt leave alone Weaken TheEconomy And Hurt Americans. Retrieved from http//www.heritage.org/research/reports/2013/02/how-the-united-states-high-debt-will-weaken-the-economy-and-hurt-americans Colander, D. C. (2010). Macroeconomics (8th ed.). Boston, MA McGraw-Hill/Irwin.Italy Trade, Exports and Imports. (2010, March 27). Retrieved from http//www.economywatch.com/world_economy/italy/export-import.html John, D. C. (2010). 2010 Social Security Trustees Rep ort Continues to Show the Urgency of Reform. Retrieved from http//www.heritage.org/research/reports/2010/08/2010-social-security-trustees-report-continues-to-show-the-urgency-of-reform Mankiw, G. (2011). Principles of Microeconomics (6th ed.). Mason, OH Cengage Learning Sahadi, J. (2013, April 17). Debts impact on growth Latest study doesnt correct debate. Retrieved from http//money.cnn.com/2013/04/17/news/economy/debt-deficits/index.html