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Economic Policy and the National Debt
Ironically, when governments overspend they typically find ways to refund or restructure debt -- when individuals or corporations within those countries do the same, the consequences are quite different. Money means more than one thing -- usually an object that is traded for payment of goods or services, of exchange. However, when we talk about the government, there is a huge different in the way the money supply works within the economy. In modern capitalism, commodity money (gold and silver) was replaced by representative wealth in that currency is no longer tied to the stores of precious metals. Instead, monetary policy under the Federal Reserve states that the goal of fiscal policy is to "promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates" (U.S. Mint, 2011).
As individuals, we typically live within a budget based on our expenses and income. It consists of food, clothing, transportation, housing, etc. Excess goes into savings or investments, in theory. Large governments do not operate this way, or with this level of responsibility for the detail of budgets within a small amount of time. Instead, they often use a concept called deficit spending. This is the amount that the government exceeds in their spending over a period of time and assume that the debt...
One theory about deficit spending says it is desirable over time because it compensates for the cycles of demand (Hamilton, 2010). The other view, though, is focused on fiscal conservatism, and says governments should be required to balance a budget, and surpluses used to pay down debt. Realistically, though, the national debt has been increasing since the end of World War II, with a huge spike in the 1980s and early 1990s, until now, as of October 2012, is in excess of $16 trillion, or about $142,000 per taxpayer (U.S. Debt Clock, 2012). Just because this debt is "on the books," though, does not mean it is not real, and it is thus passed down from generation to generation. Ironically, too, foreign investors and/or foreign governments own about half of the U.S. debt, with the largest holders being the central banks of China, Japan, Brazil, Taiwan, the UK, Switzerland and Russia. The single largest holder of U.S. debt is actually China, with almost 8% of all U.S. debt and almost 30% of U.S. Treasury securities (Schoen, 2007).
There are at least two controversial ways to look at the continuation of massive debt in the United States, in particular when dealing with social programs. The United States is a nation built on the views of basic human rights and respects for the individual. Welfare is a…
REFERENCES
News. (2012). Fiscal Commission.gov. Retrieved from: http://www.fiscalcommission.gov/news
Achenbaum, A. (2007). Older Americans, Vital Communities. Baltimore, MD: Johns Hopkins University Press.
Eberstadt, N. (August 31, 2012). Are Entitlements Corrupting U.S. The Wall Street Journal. Retrieved from: http://online.wsj.com/article / SB10000872396390444914904577619671931313542.html
Pierson, C. (2006). Beyond the Welfare State. Malden, MA: Polity Press.
Sheffield, R. (July 9, 2011). President Obama Admits Welfare Encourages Dependency. The Foundry. Retrieved from: http://blog.heritage.org/2011/07/09/president-obama-admits-welfare-encourages-dependency/
From: http://www.msnbc.msn.com/id/17424874/
U.S. Mint. (2011). Information on Money. USMINT.GOV. Retrieved from: http://www.usmint.gov/mint_programs/american_eagles/index.cfm?flash=no&action=American_Eagle_Gold
https://mail.google.com/mail/?ui=2&shva=1#inbox/1346437de8c33aa8
Drugs are an especially significant problem. The high cost of prescription drugs, however, does not just derive from the expertise to develop them. Drug companies receive patent protection for drugs that allows them to charge monopoly rents. This is a distortion in the market, one that the government has determined to be socially favorable. The cost, however, has reached the point where drug costs are also socially unfavorable, particularly
Economic Policy These are the actions that the government is involved in the economic field covering systems such as setting interest rates and government budgets as well as the labor market, national ownership, and many other areas of government involvement in the fiscal conditions of the country. Government economic policies are often influenced by international institutions such as the International Monetary Fund or World Bank as well as their particular political beliefs There
Economic Policy for an Imperfect World" by Karen I. Vaughn published in "Southern Economic Journal," Vol. 62, Issue 4, 1996 After the collapse of the Soviet Union it has become evident that market economies are necessary for producing wealth. However, the case for "free markets" is far from settled as those looking for an alternative to central planning usually consider "regulated market economy" as the solution. Hence the debate about
social policy and economic policy? Social policy refers to guidelines, principles, legislation and activities that concern the way that humans live and interact. According to the Malcolm Wiener Center for Social Policy at Harvard University it refers to "public policy and practice in the areas of health care, human services, criminal justice, inequality, education, and labor."[1] Another way that one can perceive social policy is that it is a cluster of
National Economic Policies Economic policies refer to the crucial action that the government takes to control the economic aspects that might affect the cash flows in any given nation. The government is essential in ensuring that all the economic activities in the nation maintained to secure the profitable margins of the nation. The economic policies control almost every activity in the nation, which are vital in controlling the economy. The national
The country retained control over the banking system in particular, and has exerted strong control over key elements of the macroeconomic environment. Financial reform in the 1990s restructured the banking industry. These reforms increased the role of the central bank, and divided banks into commercial banks, policy banks and cooperative banks, each with its own function in the economy. There are four major commercial banks in the Chinese system. Later