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Taxpayers Case

Autor:   •  September 30, 2013  •  Research Paper  •  336 Words (2 Pages)  •  852 Views

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Taxpayers

The U.S.’s deficit spending and the subsequent debt improve the economic growth especially in a recession. This occurs because deficit spending creates a flow in the economy. No matter where the money goes, it increases production and creates jobs. However, jobs are not created by every dollar. For example, military spending creates 8,555 jobs for every billion dollars spent which is significantly less than half the jobs created by the same amount spent on construction (Amadeo, 2013). In long term, the subsequent debt is harmful to the United States economy because the government may be tempted to devalue the dollar in efforts to repay the debt owed. Devaluing the dollar makes the repayment cheaper and less expensive (Amadeo, 2013). In turn, foreign government and investors may be less willing to purchase U.S. Treasury bonds causing the interest rates to increase even higher. Taxes are required from the United States taxpayers on three levels: federal, state, and local. There are taxes on income, sales, real estate, vehicles, and even cellular phone bills. Taxpayers including small businesses, corporations, and individuals are required to file their taxes yearly. When the economy faces a recession, taxpayers are forced to work with a minimal budget for spending on goods and services. The tax rates fluctuate from year to year because it is based on the number of employed individuals there are. When the economy experiences an inflation period, the government has a few different options. First, the surplus funds could be used to pay the debt accumulated from the deficits (Hall, 2013). Second, is for the government to offer a stimulus package to taxpayers in efforts to boost the economy. Last, the government could use surplus funds for other spending, such as new domestic programs or additional defense spending (Hall, 2013). Additional government spending depends primarily on how politicians allot the funds.

Amadeo,

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