Let us write or edit the essay on your topic
"(MACROECONOMICS) Explain why the actual budget deficit is not a good indicator of the fiscal stance and suggest any other better alternatives"
with a personal 20% discount.
Download file to see previous pages...
Moreover, ideal and functional fiscal stance indicators should embrace in-depth analysis of fiscal policies and collective economic variables.
The actual budget deficit has from time to time been used as an indicator of the fiscal stance, although various shortcomings have rendered it a rather inadequate indicator. The overall balance of a government budget is basically a measure of the difference between government expenditure and revenue. In a case where expenditure outweighs revenue, the overall balance presents an actual budget deficit, which is an indication of an expansionary fiscal stance. The actual budget deficit indicates a fiscal stance where the negative impact of revenue on an economy’s aggregate demand is far much implicative of the positive effects achieved through government spending. Gross national product of any given economy at any given time is on the receiving end as it is negatively impacted by the fiscal policies put in place by the government (International Monetary Fund, 1989, p.76).
However, the measure of actual budget deficit needs to be analyzed and judged more cautiously for accurate and relevant indication of the fiscal stance. In case keen judgment and analysis of the actual budget deficit measure is compromised, it ceases to act as a good indicator for the fiscal stance with respect to other economic variables. The actual budget deficit is also regarded as deficient indicator of fiscal stance, since it only offers impacts on aggregate demand perspectives and overlooks other economic variables such as economic sustainability, monetary stance, and growth aspects. Moreover, the actual budget deficit overlooks other economic complexities such as the manner in which the deficit is financed with regards to successive impact of the country’s economic variables.
Fiscal impact complexities encompass the manner in which an actual budget deficit is financed among other special measures that are put in place to
...Download file to see next pagesRead More
Cite this document
(“(MACROECONOMICS) Explain why the actual budget deficit is not a good Essay”, n.d.)
Retrieved from https://studentshare.org/macro-microeconomics/1591592-macroeconomics-explain-why-the-actual-budget-deficit-is-not-a-good-indicator-of-the-fiscal-stance-and-suggest-any-other-better-alternatives
((MACROECONOMICS) Explain Why the Actual Budget Deficit Is Not a Good Essay)
“(MACROECONOMICS) Explain Why the Actual Budget Deficit Is Not a Good Essay”, n.d. https://studentshare.org/macro-microeconomics/1591592-macroeconomics-explain-why-the-actual-budget-deficit-is-not-a-good-indicator-of-the-fiscal-stance-and-suggest-any-other-better-alternatives.
Organisation for Economic Co-operation and Development (OECD) has predicted that government debt will increase seriously by unmaintainable levels in advanced as well as emerging economies within next 25 years.
Budget deficit has been has been an issue in both developing and industrialized countries. Originally, the issue was blamed in large for the assortment of ills that beset developing countries at that time such as indebtedness, poor investment, high inflation, and poor growth performance.
According to the essay, the deficit financing is good during crisis times to bring the economy out from stagnation but harmful if it is employed in a sustained basis year after year for the unproductive causes. Still, the underlying causes for which deficit budget is made certainly matter, regardless of the state of the economy.
It is imperative that the government’s deficit is mainly financed by borrowing from the public through selling of bonds. In addition it can b financed by borrowing from the central bank. There are diverse budgetary deficits, which include revenue, budgetary, fiscal, primary and monetized deficits (The Moment of Truth, 7).
It is always important to ensure that there is a continuous effort to ensure that the economy is in the right state to get assurance that a state can sustain itself properly. Reliable report has it that the state of California has history of large budget deficits.
Though with deep roots in history, upping the tempo in the early 1970s due to the non-proportional increases in government spending relative to the increases in tax revenues, the recent surges in the debt burden are, however, the result of extreme measures taken to mitigate the effects of the deep and prolonged recession that kept the nation on its toes with a non-convincing recovery pace.
d 43% of its total revenues from individual incomes taxes, 42% from Social Security/Social Insurance Taxes and && from corporate taxes (see Office of Management and Budget 2011 Budget-Summary Table S-3). According to the monthly budget review report of the Congressional Budget
This chapter of the book focuses on the rising deficit of USA , decreasing savings among corporate and households and increasing external debt liabilities of USA. It explores the interrelationship among the three. It warns that exports from USA are continually decreasing with the rise of China which makes our external debt huge.
3 Pages(750 words)Annotated Bibliography
GOT A TRICKY QUESTION? RECEIVE AN ANSWER FROM STUDENTS LIKE YOU!
Let us find you another Essay on topic (MACROECONOMICS) Explain why the actual budget deficit is not a good indicator of the fiscal stance and suggest any other better alternatives for FREE!