Economic Policy Essay

Total Length: 908 words ( 3 double-spaced pages)

Total Sources: 2

Page 1 of 3

Economic Policy and the National Debt

Ironically, when governments overspend they typically find ways to refund or restructure debt -- when individuals or corporations within those countries do the same, the consequences are quite different. Money means more than one thing -- usually an object that is traded for payment of goods or services, of exchange. However, when we talk about the government, there is a huge different in the way the money supply works within the economy. In modern capitalism, commodity money (gold and silver) was replaced by representative wealth in that currency is no longer tied to the stores of precious metals. Instead, monetary policy under the Federal Reserve states that the goal of fiscal policy is to "promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates" (U.S. Mint, 2011).

As individuals, we typically live within a budget based on our expenses and income. It consists of food, clothing, transportation, housing, etc. Excess goes into savings or investments, in theory. Large governments do not operate this way, or with this level of responsibility for the detail of budgets within a small amount of time. Instead, they often use a concept called deficit spending. This is the amount that the government exceeds in their spending over a period of time and assume that the debt will not be called due, as it would for an individual.
One theory about deficit spending says it is desirable over time because it compensates for the cycles of demand (Hamilton, 2010). The other view, though, is focused on fiscal conservatism, and says governments should be required to balance a budget, and surpluses used to pay down debt. Realistically, though, the national debt has been increasing since the end of World War II, with a huge spike in the 1980s and early 1990s, until now, as of October 2012, is in excess of $16 trillion, or about $142,000 per taxpayer (U.S. Debt Clock, 2012). Just because this debt is "on the books," though, does not mean it is not real, and it is thus passed down from generation to generation. Ironically, too, foreign investors and/or foreign governments own about half of the U.S. debt, with the largest holders being the central banks of China, Japan, Brazil, Taiwan, the UK, Switzerland and Russia. The single largest holder of U.S. debt is actually China, with almost 8% of all U.S. debt and almost 30% of U.S. Treasury securities (Schoen, 2007).

There are at least two controversial ways to look at the continuation of massive debt in the United States, in particular when dealing with social programs. The United States is a nation built on the views of basic human rights and respects for the individual.….....

Show More ⇣


     Open the full completed essay and source list


OR

     Order a one-of-a-kind custom essay on this topic


Related Essays

Health Public Policy Analysis

the Alliance for Healthy Cities is to encourage local governments to incorporate health promotion into all areas of public practice, economic policy, and urban development (World Health Organization, 2018). Goals of the Healthy Communities/ Healthy Cities approach include reducing public health risks including obesity, and promoting healthy lifestyles, public safety, and health equity. The success of Healthy Cities programs and policies directly depends on the empowerment of nurses at all levels of practice, including community-based nurses. Because each community presents different needs, goals, and challenges, nurses in each community can collaborate with partners and stakeholders to promote and reach realistic public health goals. Healthy Communities: Relevance to the Nursing Profession… Continue Reading...

Privatization of Space Travel

Introduction Most application of economic policy is done on either the national, supranational or subnational scales. Seldom is economic policy enacted on the non-national scale. Yet, there is the question of whether there is benefit to applying economic doctrine to space exploration. There is a corollary, in Antarctica, where various nations have signed a treaty committing to scientific activity only on that continent, and not economic activity. Yet, realistically, with space the horse is well out of the barn. Nations all over the world have launched satellites, thus far, and the more powerful nations… Continue Reading...

Oil Crises Term in West Africa

oil prices should support economic growth that is stronger, decrease inflation, and enhance external and fiscal balances, all of which ought to decrease macroeconomic susceptibilities (Baffes et al., 2015). Macroeconomic Policy Implications Macroeconomic policies deal with the functioning of the economy in its entirety. The main objective of macroeconomic policies is to offer a steady economic setting that is favourable to nurturing strong and sustainable economic growth. They fundamental elements of macroeconomic policy include monetary policy, fiscal policy, and exchange rate policy. Oil market shocks, in addition to domestic and foreign throughput, generate macroeconomic fluctuations in the economy (Crosby, 2012). Macroeconomic policies play a significant role in economies during periods of oil crisis. These policies are all the more… Continue Reading...

Neocolonialism Trade and Cocoa

only be used to bring about economic policy change conducive to the extraction of raw material wealth but would also be used to fund infrastructure projects conducive to this ‘robbery’” (Langan, 2018, p. 63). This helps introduce the cocoa industry in West Africa. Raw resources like food and minerals has become the main export of many African nations. They cannot subsist unless they farm certain crops or allow the mining of their vast reserves of minerals thus leading to a stifling of innovation and continued inability to achieve economic prosperity. West African Cocoa Industry in the… Continue Reading...

How Will Brexit Happen

economic policy for the EEA and strengthen its own position at the expense of Norway et al. This would lead Norway to block such an arrangement. Conclusion In conclusion, the possible outcomes range from no immediate outcome (delayed deal) to no deal Brexit, which could drag Britain’s economy into recession and have a domino-like effect on the global marketplace, as in the globalized world all economies are linked. Whether the no deal Brexit would be as catastrophic for England as the doomsayers suggest remains to be seen; however, what is… Continue Reading...

Understanding Voter Behavior Patterns

they will then use that information to weigh whether he will be a good president. Some Trump supporters believed Trump's economic policy will help put the United States back on the road to prosperity based on his ability to build an empire. They also believed that immigrants were at fault for the current state of the American economy and wanted Trump would solve this problem by ridding the country of such immigrants. "Many people voted for Trump because they wrongly believe that undocumented immigrants take their jobs and hurt our economy, that equality for people of color comes at a cost for whites, and that if we just give more… Continue Reading...

H&M Trade Comparative Advantages

and likely others as well. So in the short run, OPT is not an economic policy and never really was, but rather a political and social policy. In that sense, once OPT has outlived its social and political useless, the fact that it was always rather useless economically becomes more of a blatant liability. For its part, H&M should not care all that much. It will buy from the producer with the competitive advantage – the lowest cost producer that can meet quality specs. The OPT only matters to the extent that its existence causes tariffs on textiles from low-cost producing nations to be… Continue Reading...

sample essay writing service

Cite This Resource:

Latest APA Format (6th edition)

Copy Reference
"Economic Policy" (2012, October 27) Retrieved May 5, 2024, from
https://www.aceyourpaper.com/essays/economic-policy-76164

Latest MLA Format (8th edition)

Copy Reference
"Economic Policy" 27 October 2012. Web.5 May. 2024. <
https://www.aceyourpaper.com/essays/economic-policy-76164>

Latest Chicago Format (16th edition)

Copy Reference
"Economic Policy", 27 October 2012, Accessed.5 May. 2024,
https://www.aceyourpaper.com/essays/economic-policy-76164