President Obama's Fiscal policy

Table of Contents

Introduction3

Significance of Fiscal and Monetary Policy and Its Influence on the United States' Economy4

President Obama's Fiscal Policy9

Tax Plan of Obama and the View of Government9

The New Higher Rates12

Key Features of President Obama's Fiscal Policy13

Conclusion16

References19

President Obama's Fiscal policy

Introduction

President Obama encountered the learning curve, and within his first year, he put forward series of initiatives to stabilize the economy. He created long term programs to sustain growth. The most demanded and important issue of American military in Iraq and Afghanistan was adjusted, and he made efforts to change America's image in the world. He gets his success due to his deliberative methods, his leadership style, and his tight team work. When banks were struggling in their tough time, president Obama steered careful middle course relating bank bailouts. Throughout his tenure, he established a clear policy on lobbying and transparency. Despite the political trouble, President Obama has favoritism in American population (Schiller, 2008).

Fiscal and monetary policy plays an important role in lowering as well as increasing the budget deficit. The US government faces no funding pressures at present, as private-sector delivering and doubts about the global economic recovery are supporting demand for US Treasuries, keeping yields low. The budget affects the economic growth, as rating agencies have brought the economic challenges facing the US into stark relief by warning that they may take the once unthinkable step of downgrading its AAA credit rating. Standard & Poor's cited a material risk that the Obama administration and Congress will be unable to craft a credible medium-term plan to reduce the budget deficit. However, federal debt (net of debt holdings by government agencies) is forecast to raise from just under 38% of an eventual rise in US bond yields that would increase borrowing costs and curb growth prospects. The longer the government delays creating a plan to address the medium-term fiscal problem, which is rooted in federal pension obligations and government healthcare spending the greater risk of a spike in bond yields. The Republicans and Democrats have very different ideas about how to rein in the government's large fiscal deficits. The Republican plan to address the budget deficit through large spending cuts (including to healthcare benefits) has passed the House, but it is too Draconian to win support from the Democrats and, therefore, has no chance of passing the Senate (Harry, 2011).

Significance of Fiscal and Monetary Policy and Its Influence on the United States' Economy

Macroeconomics is the field of the economics that deals with how individuals change their economic behavior when there is change is the market-wide policies. Macroeconomics distinguishes the microeconomics in the approach that in microeconomics, market forces such as demand and supply are held constant and only individual behaviors of the variables have been studied. Macroeconomics on the other hand studies only variables of the market forces and nationwide policies that are implemented while putting the individual behaviors constant. One of the two applications that are widely studied in the macroeconomics is the Fiscal Policy and ...