ECO 372

Weekly Reflections
Team B
ECO/372
August 29, 2012
Peter Clifton

Fiscal Policy Paper What is the U.S. deficit surplus and debt? The federal administration account shortfall or surplus is the cash variation amongst the administration receipts and costs, ignoring intra- government transfers. However, there is a definite expenditure that adds to the liability but is expelled from the deficit. The centralized liability as a share of the nation’s earnings has speckled. Throughout the years the nation has run up deficit throughout war and depression, but somehow the debt has declined.
In principle, deficits can provide a helpful task as long as there is the ability to level the path of distortionary taxes over a period of time, in most cases over an industry cycle. Long term deficit can be valid if they finance continuing expenditures, for example an individual who finances the acquisition of a new residence or in other cases anticipated paying off with a high national income in the futures, such as investments. In a rising financial system even with permanent rising deficit, (as long as it not increasing rapidly) it is sustainable in the long run. It has been argued time and time again that the government deficits in particular the long term deficits, enforce a direct economic cost. For taxes payers this can be a good situation. The deficits can create lower interest rates allowing individuals to purchase homes, car, boats etc at an extremely low interest rate. This is a positive impact for U.S consumers.
Social Security was shaped in response to the persuasive shortage during the Great Depression. This program was considered in order to provide the working class with a essential level of income in retirement, along with disability and life insurance while working. As of today Social Security has a negative cash flow. What this means is the US Treasury has to go into a classified marketplace and issue bonds to investors associated with Wall Street and overseas to pay that $45 billion in benefit payments and also issue more bonds to Social Security to pay for that interest. The bonds are a real advantage to Social Security, but – here’s is the complex, they also symbolize responsibility by the rest of the administration. For example a business, the administration will have to make excellent on its obligations, normally by taking the funds out of proceeds, dropping operating cost or issuing new debt. What does means as it relates to the future of Social Security and Medicare users, there will be no more? If individuals don’t have an outstanding retirement fund, there future will be pretty ruff. Neither of these programs will be available to all the US citizens that have paid into it all these years.
When becoming unemployed the government will grant an individual with financial help. When the rates for unemployed individual increase that means the budget for that government support will increase, and this will create a larger budget for the government to maintain. This also means the capital is exhausted from the financial system for uncreative use and financial increase measured downward as there are fewer resources. A solid flow of revenue is the link to a successful financial system. If the deficit increases, the government will be faced with a higher unemployed rate to support.
The affect deficit has on University of Phoenix students are the increase of tuition. Institution tuition all over the U.S has been increasingly hiking over the years. It is becoming very hard for students to pay for a higher education. With limited grants available countrywide, students borrow more funds to complete their programs. This sometime put an heavy burden on the students. This also increases the changes for the student to drop out and try to pay some of the student loans down before completing the degree. Once the student completes the program, they often find it hard to locate jobs in the field they receive their degrees. As an automotive manufacturer, one of the most important tools that one would have is to have the support of the government of the development and guidance to perform on a successful platform. The guidelines that the government would put in place to support the vehicle will generate the global trade in the sector. That would in turn become the base to produce the purchase of the vehicle being produced to trade.
There are several current issues with the U.S. economy on an international level, many of these have come from public scrutiny of the US government and the decisions that they have made on how to handle trading deficits and the US of American tax dollars. People around the world have seen how our government has placed different tariffs on items that are major exports, hoping that this will drive additional revenue from different trading partners, but all that we have seen happen is that these trading partners go elsewhere for the same products, which really takes money out of the American economy money supply. Government stimulus programs are not a frequently used tactic around the world, as they are in the US, and for good reason. These bailout plans, or stimuli have not created the promised payback return rate that the government officials once stated, and this has shown the world that we can make some irresponsible decisions with our tax dollars.
However, major issues that must be overcome such as research and development to open the outlook of a sound consumer base that is strong. Only then the brand produced is a strong enough brand it will open up the consumer base which will ensures that the market will maintain growth and that will ensure trust in the investors to spend money into the brand. Then the global market can be affected by the production of the manufacturer of the automobile.
The effect of the amount of clothing and textiles that have entered the country has had a huge impact on the effectiveness of various trade preferences programs. The overwhelming effect that has caused the U.S. to create trade safeguards to protect the decreasing margin of growth that the U.S. has in the market. The safeguards were put in place after the large loss of employment in the U.S. therefore the impact of an Italian clothing importer has an overall effect on the economy and the quotas that would cause an advantage in the clothing and textiles trade opportunities.
The GDP, or gross domestic product shows the value of all good or services produced by a country or region, so the economic status of the US would greatly affect the status of the American GDP produced within the country. If the US debt is high or low, and the money in circulation is not at its normal level, than the sales of GDP within the country would be noticeably lower. If there is a surplus or a deficit of GDP, than demand and pricing will directly reflect this within the market value for all GDP. The reason for this is that if a surplus is in place, demand and price lowers, and the opposite affect takes place if there is a deficit in GDP.

Reference
The Rest of the Story on Student Loans blog.heritage.org/2012