Fiscal Policy Paper Eco372

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The United States deficit, surplus, and debt will always have an impact on taxpayers. In the state of high deficit the government seeks ways to cut and save money for debt payment. The government does this by pulling funding from programs that have little government impact. Increasing taxes also supplies the government with extra income. In addition to the reduction or elimination of certain tax credits, the government analyzes school funding for cost effectiveness. Each step the government takes has a trickling effect on taxpayer’s dollar.
The Effects of U.S. Deficit, Surplus, and Debt
When a surplus exists, the government has extra funds to spare and infuse into the economy. This surplus will increase government programs. When the
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In fact, much of the recent reduction in the deficit is due to the decline in unemployment” (p. 1). With record high deficits within the last years the idea of the government spending to spur the economy that ultimately would help reduce the unemployment level seems near impossible without further affecting the deficit rather than helping reduce it.
University of Phoenix Students When students default on their loans, it adds to the national debt. The main problem lies in the fact that newly graduated students can’t find jobs that pay enough to reduce their debt “Tarah Toney worked two full-time jobs to put herself through college, at McMurry University in Abilene, Texas, and still has $75,000 in debt. She graduated in six years with a Bachelor’s in English and wanted to go on to teach high school” (Jaffe, 2011). Yet the government still requires the students to make on time payments. A surplus allows the government to use more money for grants and loans. The extra money from the budget goes into programs like the Pell grant. This enables more students to borrow or receive money to attend college. A deficit of funds affects students the same way student debt affects the government. To combat debt, cuts to government funding will take place. When the government cuts education funding, programs that fund grants lose money. The United States International Financial Reputation

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