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Negative Effects Of US Fiscal Policies

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The current fiscal policies are having a negative effect on the U.S. economy. The tax rate for businesses remains high and makes it difficult for many small businesses to survive. Additionally, some corporations are have identified loop holes in the U.S. tax code and have kept their money overseas in an effort to avoid paying taxes. General Electric, a U.S. based company, avoided paying taxes in 2010 on $102 billion dollar because it kept those monies in accounts in other countries (Vietor & Weinzierl, 2012). Fiscal policies needs to be changed in a way, so that businesses are invited into the United States and U.S. businesses went to keep their money at home. Furthermore, the U.S. budget deficit is continuing to have a negative effect on the economy. “When the U.S. …show more content…

The budget deficit has also created unrest with the American people. People are unsure whether they should invest their money or keep a substantial amount of liquid assists. Liquid assets are those monies which are easily accessed (McConnell, Brue & Flynn, 2012). Home ownership has not significantly increased and younger people are worried about large investments into retirement and savings rather than spending the money in the economy. Having no change to these policies could ultimately lead the U.S. economy into another recession.

Monetary policy is created by the Federal Open Market Committee (FOMC), which is made up of Board of Governors of the Federal Reserve System and five Reserve Bank presidents (U.S. Federal Reserve Bank 2015). The FOMC meets regularly at scheduled meetings

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