Fiscal Policy

Fiscal Policy

Introduction

Fiscal Policy

It is the Federal Government spending and the procedure of tax spending by the authorities, fiscal policy is used in crucial circumstances for the performance and enhancement of the economy. It is the earnings by which a government regulates and set the level of spending to observe the manipulation of the financial systems of the country. It makes a proper combination with monetary policy to monitor a nation's money supply. As fiscal policy works to enhance and to balance the economy by its spending and tax bearing processes, it is important to know how it works, how it is examined and whether its implementation affects people or not.

Background

The time earlier than the large depression globally there were different structures that were followed by the government which includes the political, technical and economical influences. Hence, in United States, the structure of the economy was free, in other words it was the “Free Economy” that was being followed. The major changes that happened after the Second World War, government had no other option but to determine the considerable options and play a positive role in order deploy the employment structures, the business life cycles and inflation that could affect the economy unconstructively. Depending on the political attitudes and perspective of the people who were in power at that point of time, government is able to restructure and control the economical observable facts.

Conservative-Liberal Democrat

This one was easily envisaged as both sets of MPs added up to a comfortable 363, easily able to survive all but the most massive backbench revolts. On the plus side Clegg and Cameron, both public school and Oxbridge, seemed to get on famously well personally; both believed in robust approaches to dealing with the deficit; and both shared antipathy to Labour's record on human rights. Against it however was a formidable list of disadvantages: Lib Dem and Conservative activists, whilst they cooperated on some councils, were frequently at daggers drawn over bitterly-disputed local issues. Most of the former were naturally closer ideologically to Labour, and many Lib Dem MPs had been elected only through persuading Labour voters to vote for them in order to keep Conservatives out, not to put them in.

Moreover, Lib Dems feared a coalition might absorb their smaller party via a new realignment of centre-left and centre-right as had happened to the National Liberals in 1931 when they supported the Conservatives. In addition, the Conservatives were mostly opposed to the European Union while Lib Dems were essentially committed to it. But the crucial bone of party contention was reform of the voting system. Once again the 'third party' had done badly, garnering nearly a quarter of the votes yet less than 10 per cent of the seats. Lib Dems were desperate to achieve a more proportional system of voting while the Conservatives, aware that some 60 per cent of voters were left of centre, feared that such a system would lock them out of power possibly indefinitely.

Labour-Liberal Democrat

The realignment possibility described above made it very dangerous ...