Fiscal Policy in the Us

Fiscal Policy In The U.S.

Fiscal Policy in The U.S. "Real plans for real people." This was the coined theme for the Bush campaign back in September. As far as I can see with his tax cut plan in doesn't involve "real people". It may just depend on your definition of the term, but the "real people" of America are the middle class, hard working families. Bush's tax plan is now said to be $1.6 trillion over a ten year period of time. Most of this money will go to the upper brackets, the "better off". Granted they do pay the most money, but then when you think about it, why do they need the cut? Can they not afford to pay their taxes? In this economic time of a feared recession our government should be doing everything in their power to avoid this situation. Having a prolonged tax cut does nothing to help the economy now. By the time the money is given back we and more than likely to have already succeeded this economic down low. The economist will tell you the in order to dodge this the money must be given back now. If the money is given back earlier there is a better chance of people spending it and stimulating economic activity. When looked at by this point of view I most definitely agree with Laura D'Andrea Tyson when she said, "Bush wants a large tax cut for political reasons, not economic ones." When Robert J. Barro discuses how he thinks the tax cut will stimulate investment and growth, increase incentives to work and save, and lower the amount of money Congress can spend, I find myself disagreeing with him. As said earlier Bush's tax cut will do very little, if anything, to help stimulate growth. Ten years is a very long time. As for increasing the incentive to work and save, I find it hard to want to save my money when they take it away for taxes. If you want to give an incentive to save, why not turn to VAT's instead of income taxes? I know this would be an almost impossible thing to accomplish but the way it was explained to me was so clear. I thought in my head, "Duh! Why don't people explore this option?" Also, if they lower the amount of money Congress can spend they are lowering the amount of money for schools and education, among other things. A controversial part of the budget includes spending money for religious based activities and voucher's so that