Federal Fiscal Policies of the U.S - Assignment Example

The fiscal policy has been instituted to see the government earn more revenue which is to be used to reduce the government debt which has been rising over the years, especially following the release of stimulus packages to revive the economy after the financial crisis began. The fiscal policy currently in place disfavors the rich as it would see them pay more taxes. The middle class is also disfavoured by the fact that they have to pay a 2% higher payroll tax than they have previously been paying.

If not for the easy monetary policy that the country has adopted, many sectors of the economy would have been grossly affected by the financial policy and the unemployment levels would remain high. Generally, the fiscal policy will benefit those to whom the government is indebted. The Taiwan Government has adopted an expansionary fiscal policy for the last seven years (Liu, 2013; Weebly.com 2014). The policy includes raising spending on defense each year by 7.8%. The policy is aimed at stimulating domestic demand (weebly.com 2014). This measure has been taken in response to volatile exports.

The government intends to invest in infrastructure and hopes that economic growth will be more impressive. The policy favours local businesses and the general population although the government’s level of debt will keep rising.