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Fiscal Policies: George W. Bush Vs. Barack Obama

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Comparison of Fiscal Policies: George W. Bush versus Barack Obama Justin Wallace Central Texas College Patrick Smith ECON 2301 Abstract The fiscal policies of both George W. Bush and Barack Obama and the effects of those policies on the economy of the country. A comparison between the two is necessary to have a better understanding of how the once surplus budget turned into a deficit in trillions. Both policies have some resemblances and differ on numerous occasions as well. However, both gradually deteriorated the economic growth and failed to recover the total debt. Keywords: fiscal policy, recession, deficit, Republicans, tax cut, bailout. Introduction According to Reem Heakal, “What is fiscal policy?” …show more content…

Bush and Barack Obama’s policies. Both have managed to increase debts and cause problems of their own thus affecting the economy in their own ways. There needs to be an amendment of the preceding and present fiscal policies starting from the establishment of this decade to the existing year. To comprehend the effects of each one of them and then lay blame on to one, both or neither, one needs to first understand the policies and then the aftereffects. When President Bush took office, the budget was a surplus which turned into a budget in deficit due to recession. The budget in deficit further deteriorated into 400 billion dollars a year due to tax cuts. After that, during the years 2005 to 2008 the economy boomed and the deficit was reduced to 200 billion dollars a year. In September 2008, the financial crisis hit as a result of which the budget deficit returned to 400 billion dollars a year. The cost of a decade long tax cut from 2001 to 2010 was 955 billion dollars. (Cited in Citizens for Tax Justice, Joint Committee on Taxation, and Congressional Budget Office [Article], http://costoftaxcuts.com/about/) Not only did this era see tax cuts but it also comprised of a large number of bailouts that too contributed a lot to the budget deficit faced now. Some argue that it still contributes in the current financial crisis faced by the …show more content…

That is a clear statement, that either way it was a burden on the tax payer. Both governments facilitated using tax cuts and bailouts but policies that could later recover were not effective enough. There are still extensions of the former fiscal policies in play and they still contribute in increasing the debt. Even the absence of recession failed to regulate or reduce the total debt. There needs to be a revision of the previous and current fiscal policies starting from the beginning of this decade to the current year. Only then a policy should be devised to pay off the current debts and stabilize the economic

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