The Era Of Fiscal Austerity Is Over: Article Analysis

With the economy in a constant flux and new promised tax cuts on the way the article The Era of Fiscal Austerity Is Over. Here’s What Big Deficits Mean for the Economy (Irwin 2018) prepares the reader for what they will encounter in the years to come by breaking down what will most likely occur in the short, mid, and long run. They also present the reader with a slew of economic terms which vary from economic pitfalls to GDP (Gross Domestic Product). In the article the author explains that while the economy might flourish in 2018 because of all the tax cuts, in the long run our national debt will increase exponentially. The United States debt is currently 20 trillion and counting (live national debt counter) however the economy is expected
He also talks about economizing and incentives, as well as touching upon division of labor when talking about the economy and the impact the tax bill will have on the labor force which intern will have a positive effect on the economy. Another big focus of the article is the market equilibrium price and the net gain for the consumer while simultaneously net gain for the supplier. The article also very heavily shows just how much the political system can impact the economy for example the new tax bill which is heavily explained in the article is the governments answer to slow/reduce the country’s current debt by investing in the
Another example of this is when the government invest in certain markets especially when they see potential and believe that the market will eventually expand exponentially. However, they stress that the tax bill is yet to be determined and it could either be an example of the government working well or working poorly. It’s also heavily stated about the importance of GDP and the way it impacts our economy. First off what counts toward GDP are newly produced goods. Economist use GDP to see just how healthy the economy is. There’s two types of GDP real and nominal GDP, real GDP is adjusted for inflation while nominal GDP may at times appear higher because it isn’t adjusted for inflation. Inflation is essentially the value of money decreasing while prices increase. Which is the reason why nominal GDP seeming higher because the value of the current economy hasn’t been adjusted