Fiscal Policy Paper - Essay Example

The taxpayers are adversely affected by the increases in the tax imposition. Recently owing to the high fiscal deficit there has been increase in the various taxes on the employers, manufacturers, wage suppression on the employees and so on. There has been a problem of inter temporal budget and the huge deficits are actually burdening the current generation as well as the future generation. One of the analysts in New York Times stated that, “taxpayers will end up paying the costs of today’s deficits tomorrow” (Ackerman, 2004).

But in this situation tax regime has to be tightened for bringing dynamic stability to the US economy and sacrifice has to be made now. Future Social Security and Medicare users Owing to the huge fiscal deficit, the Patient Protection and Affordable Care Act enacted by the current President Obama directs towards access of equality, affordable health care and transformation within the health care system necessary to contain costs. The budget office of the congress determined that the act will allow coverage to more than around 94% of the Americans staying within a limit of $900 billion bending the health cost curve and reducing the deficit over the next decade.

The social security administration forecasts that by the next four decades from now on the trust fund of social security will be utilized in either borrowing, increasing revenue or that of diminishing profits (The Patient Protection and Affordable Care Act, 2012). University of Phoenix student With the American fiscal deficit reaching lowest levels recently hit the for -profit University of Phoenix with higher costs and tremendously declining overall enrollment. As a coping strategy the University has planned to close down around 115 locations affecting the careers of around 13000 students.

The University currently has about 328,000 students declined from a peak of more than 400,000. The closure of the branches will leave around 112 locations in 36 states of United States, the District of Columbia as well as Puerto Rico. Although the President of the University has assured that the affected students will be shifted to online courses but it will leave a sense of moral degradation among the students for sure (Veiga, 2012). The United State’s financial reputation on an international level The trade deficit of United States of America has widened in the month of August 2012 with exports falling to the lowest levels in the last six months indicating a sign of worry indicating that the global economy has reduced the demand for the US goods.

The chamber of commerce declared that the deficit increased to a level of $44.2 billion in August which is biggest gap since May. In the global front the American made cars as well as farm goods have declined. The imports reduced but with a slight 0.1 percent to $225.5 billion as purchases of foreign-made autos, aircraft and heavy machinery fell. The cost of oil also fell significantly. A significant growth in the trade deficit imparts a negative vibe as it signifies that the US is earning less on an overseas scale with respect to its domestic products.

The manufacturers of US have been also hampered by slumping economies in countries like Europe, China and other key export markets which accounts for at least one-fifth of U.S. exports. The economic growth also declined to an annual rate of only 1.3% in the quarter of April-June (Crutsinger, 2012). Unemployed individuals Unemployment is a serious problem which requires particular attention.