Saturday, March 2, 2019

Barack Obama’s $ 350 Billion Request in Relation to Fiscal Policy

The declaration of quoin by the United States of America has been the authorized indicator that the country is indeed very much affected by the global financial crisis. The country is facing difficulties in many argonas curiously when it comes to the internet site of their parsimony. This is clearly exemplified by an article that features President-elect Barack Obama urging the Congress to bring home the bacon his administration to use the other $ 350 billion of the $ 700 billion rescue package.The primary(prenominal) objective of the Obama administration is to use the $ 350 billion of financial bailout bills to suspensor the Main Street more(prenominal) rather than the Wall Street. This amount of silver will become available to the Treasury De dissipatement within the broom of 15 days unless the Congress will pass a constabulary to prevent it (Kelley and Fritze). However, several(prenominal) Republicans clearly oppose the plan to sp repeal more. They justify such(preno minal) position with their perspective that such plan will not be effective. These Republicans asserted that they will only co- accompaniment the disbursement if there be assurances that the money will not be mis fagged.There ar also some American citizens who are also skeptical more or less Obamas plan because of the mismanagement of the first base $ 350 billion during the Bush Administration. On the other hand, those who support Obamas request understand the weariness of the plurality but they encourage them not to prevent the Obama Administration to use the funds because of their disappointment with the previous administration. President Obama sought to reassure the Congress by promising them that there will be transparency to the process and more money will be directed to address the foreclosure crisis.This is in support with the letter sent by Obamas economic adviser Lawrence Summers to the congressional leaders that the countrys fragile economy entails them to act twa in quickly and wisely (Kelley and Fritze). The economic principle applicable to this article is pecuniary policy. Fiscal policy pertains to the deliberate changes in judicature spending and revenue enhancement collections designed to achieve full employment, control inflation, and encourage economic step-up (McConnell and Brue 214).In relation with this, the request of President Obama for $ 350 billion exemplifies fiscal policy. The situation of the country under which the President made this request is in cartridge holder of recession. It is said that fiscal policy is most applicable in such kind of economic condition. During time of recession, an expansionary fiscal policy is a practicable way to address the problem. A possible reason behind the occurrence of recession is that the profit expectations on investment project have dimmed which curtailed investment spending and decreased substance demand.In this case, the federal government has three main options that it can us e in order to baffle the economy. These options are (1) Increase government spending, (2) reduce taxes, or (3) use some combination of the two (McConnell and Brue 215). It is quite observable that President Obama opted to choose the first option, which is increased in government spending. A sufficient increase in the spending of the government can aid in pushing the economy out of recession.This will address one of the problems in times of recession because increased government spending will also increase aggregate demand. Nevertheless, the initial increase in aggregate demand is not the end because the multiplier effect will increase the original money spent by the government. The greater shift in the aggregate demand weave due to the multiplier process that magnifies the initial variation in spending into more successive rounds of new consumption spending (McConnell and Brue 215-216).Lastly, the governmental considerations that are observable in the article are also a part of i mplementing fiscal policy. This is due to the fact that fiscal policy is conducted in the political environment. As a result, economic considerations might be taken diversion because of political concerns. It is also a common practice for politicians to rationalize actions and policies that are beneficial to ones interest (McConnell and Brue 223). This is clearly proven by the opposite poles that the Republicans and Democrats have with regards to this issue.

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