Fiscal Policy

Clear Target

Students will be able to explain how fiscal policy is used to influence our economy.

Fiscal Policy

The federal government’s use of taxation and spending policies to affect overall business activity.

Expansion vs. Contraction

• Expansionary policies use taxing and spending to make money more easily flow through the economy.

• Contractionary policies use taxing and spending to slow the flow of money through the economy.

Social Programs

welfare subsidies designed to aid the needs of the U.S. population.Head StartSocial Security DisabilitySocial Security Retirement and Survivors BenefitsSupplemental Security Income (SSI)MedicaidMedicareWelfare (Temporary Assistance for Needy Families, or T.A.N.F.)G.I. BillVeterans' benefitsPell GrantsUnemployment InsuranceFood StampsGovernment Subsidized HousingHome Mortgage Interest DeductionHope and Lifetime Learning Tax CreditsChild and Dependent Care Tax CreditEarned-income tax creditEmployer subsidized health insuranceEmployer subsidized retirement benefitsFederal student loans

Social Security

• Provides subsidies to help cover living costs for people of retirement age.

• Started in response to the large number of elderly affected by the Great Depression.

Medicare

• Provides medical insurance for people of retirement age.

Medicaid

• Provides medical insurance for people under retirement age based on financial needs.

Public Goods

Goods or services that can be used by many individuals at the same time without reducing the benefit each person receives.

Externalities

Economic side effects that affect an uninvolved third party.

Externalities

Positive• GPS• Microwave• Flu shots• Smoking

Negative• Water pollution• Air pollution• Power reduction• Smoking

National Deficit

When the government’s planned spending is greater than its ability to collect revenue.

National Debt

• The federal government's total outstanding debt.

http://www.usdebtclock.org/