This could lead to foreign countries hesitating to

Info icon This preview shows pages 2–3. Sign up to view the full content.

View Full Document Right Arrow Icon
internation level this shows that the US reputation to pay back its debtors is low. This could lead to foreign countries hesitating to loan the US money. This also lowers the value of the dollar because the US does not have the reputation to back it. Future Social Security and Medical Users Fiscal policy would dictate that during deficits it would be best for the federal government to move into a contractionary fiscal policy in order to combat excess spending. Social security and medical users would be affected by this because the government would need to find ways to minimize the costs associated with these expensive programs. As the population size grows and ages, Social Security and Medicare taxes will have to increase or benefits will have to decrease in order to avoid problems in the future. At times when there was a Social Security tax surplus, the excess revenue was allocated to the Social Security Trust Funds (Waggoner, 2013). These funds are invested in government securities for redemption in the future. Debt affects these programs because if the programs are running in debt, there will likely be borrowing from either other programs or other countries which could get more expensive as interest rates are taken into account. The Social Security trust fund purchases debt from other programs in the form of nonmarketable government bonds (Colander, 2010). By 2021, the program will be running in deficit and will attain debt, rather than purchase debt from other programs unless changes are made (Waggoner, 2013). Unemployed individuals Just as with Social Security and Medical users, a government deficit would see a reduction to unemployment benefits if the government decides to cut spending. Recently, the U.S. government sequester has caused even further cuts to the federal Emergency Unemployment Compensation (EUC) program to be implemented by state governments (Hirsch, 2013).
Image of page 2

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern