Often when one thinks of the scope of business, running a country rarely enters into an individual’s mind. However; that is what the country is, a large business conglomerate for an entire country. Citizens entrust their government to maintain this feat. There are many intricate details in maintaining the nation’s financial and economic health. In the United States, the President and Congress govern the financial and economic health of the nation. The United States employs the fiscal policy to monitor and make deliberate changes to escalate or slow down the country’s economy. The fiscal policy process occurs via changing government expenditures and taxes that have a direct impact on the nation’s Gross Domestic Product (GDP).
Debt, deficits, and surpluses related to the government budget have a direct impact on tax payers in the U.S. Payment for the national debt comes from revenue received by the government through the taxes it collects. If the amount of tax is not sufficient to cover the liability, the result is a deficit. The government will determine the best method to offset this deficit, such as raising tax rates. The rising government debt can also lead to the reduction of the nation’s credit rating, potentially leading to a lower standard of living for generations to come. Per a report from ABC News, “savings of taxpayers may diminish in worth, the economy could see a lag in wage increases, and create fewer jobs” (Drowning in Debt, 2010).
Future Social Security and Medicare Users
The U.S deficits, surpluses, and debts affect Social Security and Medicare users, because when the economy is facing any of these problems one of the ways the government acquires the funds to help is by drawing on the funds available from these programs. “Currently, the Social Security trust fund collects more in taxes than it pays out in retirement benefits, and it lends the extra money to the federal government for spending” (Tucker, 2011, p. 349, Chapter 13). Both rely on tax payer dollars and if there is less money being circulated in the economy, then the government faces the problem of not being able to pay back the loans they have taken out from these funds. With deficits and debts rising at an exponential rate, the future for Social Security and Medicare does not look very promising. As deficits and debts grow, the more money the government needs to borrow and the less able they are to pay back these loans.
U.S. deficit, surplus and debt have a large effect on the unemployed, with a deficit, there is less money circulating in the market that may cause production to decrease meaning that there will be less manpower needed for production and service. One of the biggest deficits that impacts unemployment is the trade deficit,
White House estimates show that, for every $1 billion in goods exported, the economy creates 5,000 jobs. Unfortunately, that street goes both ways — data from the Economic ...