The people of the United States are by the fiscal policies. Team C will address the how and why the U. S. budget deficits, budget surpluses, and debt affect different individuals and institutions. There is a wide array of individuals affected by fiscal policy, which include tax payers, future Social Security and Medicaid users. The unemployed individuals and University of Phoenix students will be affected by fiscal policy. The U.S. financial reputation, an exporter, and importer, and affects of the GDP will also be covered about the affects of the U.S. fiscal policy. Effects on Tax Payers
The U.S. budget deficits can affect tax payers in a negative aspect by increased taxes to offset the deficit. The budget deficit does impose interest costs on tax payers, meaning that the national savings totals are lower and this decreases the amount of private investing (Ackerman, 2004). This higher interest cost will have a direct effect on the trade deficit which will cause Americans to become even more dependent on exports for their consumer needs.
The U.S. budget surpluses would affect tax payers in a positive aspect by refunding tax payers on overpayments. Another benefit from a surplus is that it will stimulate investing by offering lower interest rates, which would increase tax payers savings when filing taxes (Hall, 2012).
The U.S. budget debt affects the tax payers. The U.S. government cannot sustain the economic level of owing more than they are receiving. The other option for shortening the debt is to limit spending by reducing benefits and programs. The interest rates may rise because of a decrease in the purchase of Treasury bonds from foreign investors (NDT, 2012). Effects on future Social Security and Medicare user
The United States Budget Deficit is only going to hurt the future Social Security and Medicare Users. Overspending will lead to no money in these accounts. The retirement age will continue to go up as long as there is no money to support the aging Americans. The Budget Surplus however would help Social Security and Medicare users as money increased and the deficit decreased. Effects on Unemployed Individuals
The deficits affect unemployed individuals directly as the higher the deficit, the higher the unemployment. The reverse is also true, by lowering the deficit and investing in programs that will stimulate growth, the unemployed individuals are more likely to find work and contribute to paying off the deficit (Ginsburg, 2009).
The U.S. budget surplus would positively affect unemployed individuals because this would allocate more funds to be used in further economic development, such as increasing the support to infrastructure improvements. This increase in the allocation of funds to support an infrastructure improvement would lower unemployment, which would increase expansion (Hall, 2012).
The U.S. budget debt affects unemployed people directly but the government has set up debt management programs to assist the unemployed people on getting back on the correct financial track. The Department of Education offers an income-based repayment option to assist unemployed individuals in repaying their student loans (Worksham,2012). Effects on University of Phoenix Students
University of Phoenix students affected by budget deficits, budget surpluses, and debt. Congress takes money from student loan programs and redistribute for other purposes (Nelson, 2011). Earlier this year President Obama disclosed the proposed budget for the year and the area that will be affected is the Federal Pell Grant Program (Quinn II, 2011). A budget surplus would enable the students to continue receiving help from the government. Effects on the United States’ financial reputation on an international level
The United States is experiencing fiscal challenging because of outstanding debts owed to other countries. The U.S. is borrowing and selling off assets to these countries...
References: Ackerman, S. (Nov/Dec 2004). The Budget Deficits Bigger Brother. Retrieved from:www.fair.org/index.php?page=3562
Colander, D. C. (2010). Macroeconomics (8th ed.). Boston, MA: McGraw-Hill/Irwin.
Ginsburg, H. (2009) National Jobs for All Coalition: Increasing Unemployment Increases the Deficit. Reducing Unemployment Reduces the Deficit. Retrieved from url:www.njfac.org/us1.htm
Hall, S. (2012) How does the government surplus affect the economy? Retrieved from url: www.ehow.com/about_6193482_government-budget-surplus-affect-economy_.html
Huntley, J. (2010). Federal Debt and the Risk of a Financial Crisis. Retrieved from http://www.cbo.gov/publication/25094
NDT (2012) No Debt Today: How the National Debt Affects You. Retrieved from url: www.nodebttoday.com/how-national-debt-affects-you.php
Nelson, L. A. (2011). Inside Higher ED. Retrieved from http://www.insidehighered.com/news/2011/07/18/increased_student_loan_interest_rates_to_reduce_deficit_and_probably_not_expand_grants
Quinn II, C. (2011), THE FAMUAN. Retrieved fromhttp://www.thefamuanonline.com/news/obama-s-budget-cuts-college-student-grants-1.2478105
Worksham, R. (2012) Government Debt Relief Programs for the Unemployed. Retrieved from
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