Matthew Seobarrat30

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Valencia College *

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Economics

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Feb 20, 2024

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Matthew Seobarrat 12/7/2023 3.03 Fiscal Policy Fiscal Policy is when the government uses taxation and government spending to influence the economy. The goal of a Fiscal Policy is economic growth, stability as well as full employment. The tools the government uses are taxation and spending while the entity that controls this is congress. I believe that Congress should not create a law mandating a Balenced federal budget. I believe that if we were to put a limit on the federal budget it would lead to limited flexibility as well as cuts to some important programs to save money. I also believe that there is nothing wrong with the government borrowing money to build enough wealth for programs and projects. Just like buying a house or car there is no reason to pay for it the same year. Article title: Supreme Court kills Biden student loan relief plan Source URL: https://www.nbcnews.com/politics/supreme-court/supreme-court-rule-bidens-student- loan-forgiveness-plan-friday-rcna76874 Date of publication: June 30, 2023 1. Describe the fiscal policy action discussed in the article, including its status (such as under debate, approved, or rejected). The action discussed in this article was a plan to allow eligible borrowers to cancel up to 20,000 dollars in debt. This would have costed more than 400 billion dollars. The Supreme court has rejected this plan stating that this plan was an unlawful use of presidential power as it was not approved by congress. 2. Would the fiscal policy action discussed in the article promote price stability, full employment, and/or economic growth? Explain. I believe that the action discussed in this article would have promoted economic growth as the people who would have been forgiven could put their money to other costs. 3. Would the fiscal policy action discussed in the article, if approved, contribute to creation of a budget surplus or a budget deficit? Would this likely increase, decrease, or not affect the national debt? Explain. The action discussed in this article if approved would cause a budget deficit as the addition to 400 billion dollars would increase the national debt. The government would not be able to pay all 400 billion to colleges within a few years which would increase spending each year. 4. Do you approve or disapprove of the fiscal policy action described in the article? Explain your response and identify at least one tradeoff for your choice. I disapprove of this policy action described in this article because although forgiving 10,000 per person would be nice there just is not enough money to do so. If this were to pass a drawback would be inflation, which is already getting bad, and an increase in the national debt.

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