2004). The new Fed chairman would necessarily have to monitor inflationary pressures to prevent spikes in the cost of living. On this note the new Chairman would move from a policy of targeting core inflation which excludes the so called volatile food and energy prices, and focus on the headline rate which includes these components. Additionally the Consumer Price Index calculation would change to reduce the weight of housing in the index, "which makes up 41% of the typical consumer's budget" (Mankiw, G. 2004). More weight would be placed on those items which have steadily increased in price far above even the headline rate over the last decade: energy, food, health care, and education. These steps would help stabilize the dollar as a store of value for the consumer and investor.
The last selection criterion for the new chairman will be their belief in the purpose and efficacy of the prior chairman's avocation of several "bailout" measures designed to prevent against systemic risk in the system. The discussion of this topic and additional policy measures will follow later in this exposition.
Appointee: Chair of the Council of Economic Advisors and Fiscal Policy
The Council of Economic Advisers, an agency within the Executive Office of the President, is charged with offering the President objective economic advice on the formulation of both domestic and international economic policy" (White House.gov. N.D). The choice of the Chair of the Council provides considerable insight into the economic policies the administration will follow. In choosing the Chair there will be four distinct criterions: tax policy, trade policy, regulatory policy, and government spending.
On tax policy the administration strongly favors a policy of lower marginal tax rates on individual and business:...
Fiscal Policy What are the three major categories of revenues for the federal government? Please comment on each and indicate their relative importance to each other. Relative importance can be indicated by dollar amounts, percent of total revenue or expenditure or, though less informative, by ranking. The three categories of revenues for the federal government include: individual income taxes, corporate income taxes and social insurance taxes. These areas are interconnected to each
Fiscal Policy The three major categories of revenue for the federal government are individual income taxes, corporate income taxes and social insurance taxes. The most important of these are the individual income taxes, which represent 55.1% of the total budget revenues, or $1.396 trillion. The second-most important revenue category is the social insurance taxes, which account for $978 billion, or 34.6% of the total budget revenues. The third-most important category is
Even the state needs resources, so it may decide to borrow money from the bank. JP Morgan could also emit bonds for the government, and a nice fee could be made out of that. However, should government spending be excessive, this could lead to inflation, which would seriously affect the bank's activity and profit margins. The ways in which JP Morgan would feel the effects of fiscal policies are countless.
Ergo, economic growth through the private sector is not possible without federal deficit. In his own words, "while it is commonly believed that continual budget deficits will bankrupt the nation, in reality, those budget deficits are the only way that our private sector can save and accumulate net financial wealth" (Wray, 2009). 3. The Reformation of Entitlement Programs The article selected to answer the question relative to the future strategies that
Fiscal policy of the United States is one of increased spending to help stimulate the economy. A good example of this can be seen with the President's proposal to spend $447 billion on encouraging employers to hire new workers and through government infrastructure projects. While at the same time, it is providing assistance to the states to help hire police officers, fireman and teachers. These different elements are important, because
Fiscal Policy Between 2007 and 2009 the U.S. economy experienced a severe recession. In an effort to stimulate the economy, the federal government passed a stimulus package. Explain the federal government's use of fiscal policy (the stimulus) to promote growth and employment. Support your ideas with concepts found in the assigned reading. Include the following in your response: Government spending can contribute a significant amount of economic activity into the economy. When
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