...Surplus Deficits ECO/372 September 10, 2010 Surplus Deficits A surplus in this economy can be beneficial to many businesses and as a whole society as well. A surplus benefits out society when producers and consumers sell their goods or services to the public. It is known that economic surplus is made up of two parts which are producers and consumer surplus. The producer surplus is the benefit that it receives from doing their service to the public at whatever the market price is at that time, rather than selling their services at a much cheaper rate. A consumer surplus is very different and opposite of that of a producer surplus. A consumer surplus is the benefit that it receives from purchasing their services from the public where they would be willing to pay more for the service they purchased. A government budget surplus can be very beneficial to the economy. A government budget surplus can be beneficial in that it gains revenue through taxes and other fees associated with the surplus. A budget surplus does have its effect on the economy in how the government officials use their funds. Two periods in time that comes to mind where the United States had to run their budget surpluses is the War in Iraq from 2003 to 2011, and the September 11th, 2001 attacks in New York at the World Trade Center. According to “A History of Surpluses...
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...| The Effects of Running a Surplus or Deficit Budget | ECO 372 | The current state of America’s fiscal policy is of major concern for the majority of the populace with the constantly increase of health care, gas, home interest rates, and staggering unemployment number, some are wondering if this nation will survive. Even many fiscal experts are forecasting that The United States is on road to fiscal disaster which seems to confirm the fears of the nation. Compounding the problems is an elderly populace and increasing deficit problem, a growing segment of government spending apportioned to interest expenditures and entitlements for the upcoming years resulting in plunging government's prolific investments and pushing out private shares. The deliberation of this paper is centered on how and why the U.S.’s deficit, surplus, and debt influences on the taxpayers, impending social security and Medicare users, the unemployed, University of Phoenix students, America’s financial reputation on a global scale, national (export) automotive manufacturer, Import of Italian clothing company, and gross domestic product (GDP). The near term objectives of the paper to convey information as complete glaze of US fiscal policy and how the current fiscal policy influences the nation. American taxpayers play a major role in the economy; this is why there is so much commotion about the millions of immigrants who do not pay taxes. The role of a taxpayer and the role of the economy go hand...
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...Federal Budget Deficit/Surplus I'm looking at a comment in speech when Obama talked about the federal budget. Obama reached a deal to increase spending over the next two years by cutting some social programs and raise the federal borrow limit. He reached an agreement that would raise spending by $80 billion and an extra 32 billion dollars for the emergency war fund. By increasing spending, it would make cuts in medicare and social security disability benefits, etc… The $80 billion is just over one percent of the yearly annual budget. Obama uses Obamacare as a way to lower the debt in a way the differentiating taxation. President Obama is concerned with the people of the United States, but he is still trying to raise the money by making...
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...Reflection Summary A budget deficit occurs when government expenditures exceed the amount of revenue coming into the economy through income and taxes. Since World War II, the United States government has run a large deficit, instead of a surplus. Depending on the particular condition of the economy, a deficit can be right or wrong. The goal is to improve the economy when the government runs a budget deficit. The government will spend money to help stimulate economic growth when the economy is not progressing at a rate the country expects. Both the government and society benefits from the added debt when the government spends money to improve revenue for the long-term. A budget deficit can help businesses create more jobs to limit the amount of unemployment and enhance consumer income. The debts accumulated may be the result of spending on worthwhile projects like road repair or necessary services like education. The government is also spending to establish programs for the longevity of the nation. A budget deficit can have an adverse effect on the economy. A budget deficit can result in increased debt. As the debt increases, the government increases taxes. When taxes are higher than business owners can afford, the result is an increase in unemployment. A budget deficit can also lead to an increase in printed money, which decreases the dollar value and increases inflation. Budget surplus is the opposite of the budget deficit. A budget surplus occurs when government expenditures...
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...has learned that deficits, debts, and surpluses are accounting measures. There are many things to consider as important whether a budget is in surplus or deficit. The true importance is the health of the economy. The state of the economy needs to consider when to make a decision about whether deficits or surpluses are beneficial for the United States. Taxpayers have implemented how their money is in use when paying off deficits and how surpluses are in use to give back to the country. Debates of how taxpayers should use their money extremely important on how it affects deficits, debts, and surpluses. One debate is about how concerned an individual should be about deficits involves the future of the Social Security System and Medicare users. Unemployed individuals depend on these types of benefits and the number of users affects the accounting measures. To discuss the United States deficit, here are some examples of opinion from a University of Phoenix student. In addition, part of our discussion will illustrate the United States financial reputation on an international level. This will include an example of importer and exporter. Our team will give an example of an (importer) an Italian clothing company and for an (exporter) a domestic automotive manufacturing. Understanding accounting measures involves the health of the economy, which can be determined by the measure of the gross domestic product (GDP). When the United States is facing a deficit or debt the taxpayers...
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...Week Four Reflection Summary ECO/372 November 5, 2012 University of Phoenix Week Four Reflection Summary In week four, Team D—Joe, Beverly, Kevin, and Rachel—learned about deficits, surpluses, and debt in relation to the macroeconomic health of the United States. The group as a was very comfortable with the discussion of the week while learning new information about the health of the economy. The following is a summary of what the team learned in regard to deficits, surpluses, debt, and the health of the economy. Budget Deficits Budget deficits occur when government expenditures exceed the amount of revenue coming into the economy through income and taxes. A deficit is a summary of how the economy measures the state of using and accounting procedures. Since World War II, the United States government has run a large amount of deficits, as opposed to surpluses. A deficit can be good or bad, depending on the specific condition of the economy. When the government runs a budget deficit, the goal is to improve the economy. When the economy is not progressing at a rate the country expects, the government will spend money to help stimulate economic growth. If the government spends money to improve revenue for the long-term, both the government and society benefit by the added debt. A budget deficit can help businesses create more jobs to limit the amount of unemployment and improve consumer income. The debts accumulated may be the result of spending on worthwhile projects like road...
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...Week five Fiscal Policy Paper * Depending on the time, the economy can have many financial stages. There are times when the economy is facing a budget deficit, which means the tax revenues in the government are lower than the government expenditures. The economy can also experience a surplus and high debt, which can also drain an economy. The state of our government can affect people from taxpayers, to the elderly who are collecting social security, to children needing medical and governmental benefits for their well-being. The government debt situation can be either an advantage to the population by lowering taxes, or a disadvantage by making taxes higher. * To know how taxpayers, future Social Security and Medicare users, and unemployed individuals are affected by the U S.’s deficit, surplus, and debt. It is important to understand the definitions of deficit, surplus and debt. Surplus occurs when there is more supply than demand, as in extra resources. Deficits occur when a government's expenditures exceed the revenue that it generates. Debt is an amount owed to another person or government in economics. * Taxpayers can benefit from a budget surplus. A surplus can create a reduction in the tax rate which leads to a higher consumer’s savings rate. The less taxes that consumers have to pay allows spending or savings in other areas. An increase in national savings (reduction in tax rate) also creates additional money that can be available for banks to...
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...Fiscal Policy Paper Deficit can affect multitudes while a surplus creates positive results for those on the receiving end. A debt requires the liability to be paid or the liability may be repossessed or rendered bad credit to the individual. While Americans face issues with debt, surplus, and even deficit it is important to know that the United States deals with it first hand as well. Several areas the three topics affect include tax payers, unemployed, Social Security, Medicare, imports, exports, and the GDP. A synopsis of Team B’s discussion of the topics follows. Tax Payers Taxes are imposed on the United States by three categories; federal, state, and local government. Tax payers are taxed on their income, payroll, property, sales, imports, estates and gifts, as well as various fees. Tax payers are required to file tax returns whether it be for a business, corporation, or individual. Tax payers are affected by the U.S. deficit when there is a shortfall in revenue which is the result from the National Debt increasing. Additionally when there is a surplus tax payers are affected as well. Future Social Security and Medicare Users Social Security Administration figures that by the year 2040 the SS trust fund will be used up causing utilizing one of three options: borrowing, increasing revenue, or lowering benefits. The Medicare program is estimated to be much closer to crisis than the SS trust fund. In contrast to current Medicare and Social Security benefits budget...
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...the United State’s deficit, surplus and debt have an effect on today’s current events. This paper, will discuss the effects from taxpayer’s, future social security and Medicare users. Also, the unemployed individuals, even our fellow University of Phoenix peers have part in today’s politics. This essay will address the United State’s financial reputation on an international level, a domestic automotive manufacturing, and an Italian clothing company, and the importance behind the Gross Domestic Product (GDP). Fiscal Policy Economics is a daily issue that concerns personal and business financial activity. The United States is known as one of the strongest financial countries. It is complicated to understand how the United States deficit, surplus, and debt can affect the population economy. The economy can affect different areas and individuals, such as taxpayers, unemployment individuals, GDP, importer and exporter companies, college students, social security and Medicare users. The economic is not affecting only the present but will influence in the future financial activity. Unemployed individuals A deficit is a loss under payments and surplus is the excess over payments. Debt is equal to deficit minus surpluses. If the government has a surplus on the budge, it means there is money saved that can be used to generate employment. When a deficit is negative, it means that the economic has a very low opportunity to growth. The U.S.’s deficit affects unemployed...
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...United States Deficit, Surplus, and Debt ECO/372 United States Deficit, Surplus, and Debt In the United States, the deficit, surplus, and debt of the nation have an effect on many aspects of the nation’s economy. Taxpayers carry heavy burdens, both today and in the future, to support the economy as it recovers from a recession. Future Social Security and Medicare users face uncertainty and possible poverty as current negative cash-flow eats away at the integrity of future Social Security and Medicare. The effects of a high unemployment rate create a ripple effect that certainly will reach into the economy of coming years. Gross Domestic Product is affected as international trade and deficit fluctuate with the country’s interest rates, inflation, and dollar buying power. Even University of Phoenix students see the effect of these economic aspects in their tuition. Although these are not the only issues of concern in the current economy, these serious issues are affected by the deficit, surplus, and debt of the nation. According to experts, the taxpayers eventually will pay the costs of today’s deficit tomorrow. To finance last year’s trade gap, Americans had to borrow $503 billion in international markets. Foreigners will buy billions of dollars’ worth of United States corporate mortgages, and government bonds. They lend Americans the money needed to import more from the rest of the world (Ackerman, 2004). The additional expense is the burden of the American taxpayer. Meanwhile...
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...Italian Clothing Company The deficit, surplus, and debt of the United States affects an Italian Clothing Company because; when it comes down to the United States deficit, it would cause the market to be over-run by foreign products. The rate in which a country is exporting is not at the level with it’s’ exports, a surplus would lead to more importation by the Italian Clothing Company and debt, it would cause the imports to be reduced (because many business partner would be hesitant to do business with the importer. Gross Domestic Product (GDP) Effects on Italian Clothing Budget Deficit Expansionary polices, such as those incorporated into an economy during a recession, have positive effects for imports. Increasing the money supply will increase an American consumer’s option to purchase more foreign goods such as Italian clothing (Colander, 2010). Budget Surplus Contractionary policies, such as those that may occur in an economy operating at its productive capacity will have a negative effect on the purchase or Italian clothing. Levels of trade with foreign countries will decrease from the peak productive period. Debt Initiatives to pay-down the United States debt could have a negative effect on the economy, thus reducing the demand for Italian clothing. However, if efforts to lower the debt are successful there will be less tax burden on consumers in the future leading to more opportunities for foreign trade. An Italian Clothing Company (Importing) When the...
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...at large. There are two very crucial objectives of fiscal policy; first is to distribute the goods that contribute to the welfare of the public and long-term growth of the economy and secondly is to facilitate the stabilization of the cyclical fluctuation of the economy (Carmignani, 2013, p 1). As a supplement, on the other hand, the budget facilitates the accomplishing of these objectives. The purpose of this discussion will be evaluating the fiscal policy as implemented by the government of Australia between 2010 and 2015. The study will state whether the Australian Government followed expansionary or contractionary fiscal policy over the stated period. The study will also discuss on whether budget deficit always indicate an expansionary fiscal policy and whether budget surplus always indicate that fiscal policy is contractionary. The study will also look into the May 2015 budget to determine whether the Australian government implemented the expansionary or contractionary fiscal policy. Finally, the study will ascertain on the effectiveness of the Australia’s fiscal policy between 2010 and 2015. Fiscal Policy between 2010 and 2015 The two approaches of fiscal policy are expansionary policy and contractionary policy. Under expansionary policy, the government spends more money through such expenditures as security, infrastructure projects, health facilities, education and many other areas to add more money to the economy. Additionally, lowering of taxes is another aspect of...
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...Fiscal Policy Fiscal Policy The United States’ deficit, surplus, and debt have had and are currently continuing to have a profound effect on the economy of this country. Although the federal government could play more of a role in boosting exports through tax reform and training assistance, some industries are staging a comeback on their own without help from Washington, because of improving marketplace trends. Taxpayers and Unemployed Individuals The United States' deficit, surplus, and debt have a very far-reaching effect on taxpayers and unemployed individuals. The immediate effect on taxpayers is as the deficit goes up and debt does as well the taxpayers are going to absorb the brunt of repayment. This will also indicate that as the deficit climbs and debt becomes larger that the dollar will become less valuable. The dollar losing value means that employers as well as consumers will have to be more careful with their money. The trade surplus has very little effect on the consumer because without a tariff in place on the outgoing goods it does not offer much if any of a return to the taxpayers. While the taxpayer and employers are watching every last dollar that makes it harder for the unemployed individual to get a job in his field. At this stage high quality jobs are harder to come by because employers have to make cuts to maintain pre-recession profits. Therefore, unemployed workers are forced to stay on unemployment or try for jobs with lower skill qualifications...
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...The United States federal deficit is continually contracting or expanding depending on how expenses paid match up to incoming revenues. A government policy which implements either expansionary or contractionary policies greatly influences the size of the deficit as well as any surpluses gained. Because deficits and surpluses are such an integral part of our economy, the way they affect almost every sector of our lives can be far reaching and long lasting. In this paper we will evaluate some general side effects of having either a surplus or a deficit and how they affect specific areas of our lives. Taxpayers If the economy is in a recession, taxpayers have a budget with minimal amount of money to spend on goods or services. The tax rates change because of the number of employed individuals working in a year. If the economy is going through an inflation period, the government has options for those extra funds. One option, if the government has run budget deficits in the past, is to use surplus funds to retire the debt accumulated from those deficits, as Mankiw discusses in his book (Hall, 2012.) Another option is for some of the money to be given back to the taxpayers for boosting the economy with purchases of merchandise for households. A third option for the government would be to direct the surplus funds toward other spending, such as improved infrastructure, new domestic programs or additional defense spending (Hall, 2012.) Future Social Security and Medicare Users Taxpayer...
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...ECO/372 Kevin Mc Kinley Week 4 Team Reflection Already we are into week four of our class in macroeconomics. This week held some insights for us all. We learned about assets, deficits, surplus, and debts. We also learned about fiscal policy and the problems involved with it. We all enjoyed the discussion questions. Everyone had their own beliefs about the system and how to change the OPEC oligopoly. It was all very interesting. Kimberly states in week four the material covers deficits, surplus, debt, and assets. First the material defines deficits and surplus that was easy to comprehend and extremely enlightening. As a former college student majoring in business the terms should be comprehendible but was surprising to learn the true meaning of both deficits and surplus. Deficits and surplus are both dealing with money, first the chapter 17 defines deficits as a shortfall in revenues under payments, explaining that surplus was the opposite, and this was easily understood. After further detail about deficits and surplus the chapter later introduces the definition of debt and assets is common knowledge. The material goes on to explain the difference between individual and government debt. The material concludes the chapter by explaining the burden of the US government deficits or debt. Kimberly also believed that in chapter 18 of the eBook, the material continues to cover topics written about earlier in chapter 17. These topics, found in both...
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