ECO 2301 Fiscal Policy ESSAY.docx

ECO 2301 Fiscal Policy ESSAY.docx - Kristi Adams Economics...

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Kristi Adams Economics 2301 Fiscal Policy Discussion The Trump Administration Could Test Whether Deficits Help the Economy by Neil Irwin The article I chose to write about was one based on the new president elect Donald J. Trump’s plan for a fiscal policy. He has said he will cut taxes across the board and spur military spending and rebuild infrastructure. His plan will increase budget deficit, increase interest rates and inflation which could offset the growth effects that the plan would seem to have on the economy from the initial tax cuts. It is and I quote “Mr. Trump appears likely to enact a fun- house mirror version of what many liberal economists have advocated for years: Keynesian fiscal stimulus.” Neil Irwin the writer of this article gives the points of views and opinions of different qualified individuals who are both for and against Trump’s fiscal policy ideas. The Keynesian fiscal stimulus is when the government tries to stimulate one or more of the components of aggregate demand to raise output, jobs and incomes during an economic recession. Some say the effects of the higher inflation would be a plus and could spur faster growth. The effects of this approach for the short -term regarding the tax cuts are positive for our countries most wealthy and would benefit the them the most. Mr. Trump and some economists believe that if taxes are cut, there would be more spending and this would offset any budget deficit. The tax foundation strongly disagrees. They say that this plan would reduce Federal
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