Discussion 1: Fiscal policy gives the U.S. government the power to affect the nation’s productivity levels. They do this by either increasing or decreasing taxes and/or public spending. The desired effect is a combination of increased employment and a “healthy value of money” (Heakal). In a democratic society, the government would use fiscal policy to prevent recessions by reacting to the predicted productivity levels as they see appropriate. Some people believe that the government should not be allowed to run annual budget deficits, which is why the balanced budget amendment was proposed. Those that believe adding a balanced budget amendment to the U.S. constitution think it will help protect our future debt by limiting the amount the federal government could spend to the federal receipts. However, the opponents believe “that it could limit the ability of future policymakers to use fiscal policy to counteract recessions or respond to national emergencies” (“Budget Basics”). I could see the pros and cons on both sides, although I lean towards the opposing side. This is mainly due to not wanting to restrict the prevention of recessions. Discussion 2: In a democratic society, fiscal policy can be either looked upon well by the public, or they could be against it. The most likely event that a fiscal policy would be conducted, is that the government would begin to lower taxes to boost the population’s spending, and raise government spending. As years go on, the government would slowly increase taxes to lower government spending, as this would be more successful since the economy has stimulated itself in the earlier years to reach back to equilibrium. People get into debts by spending more than they can and in doing so, causes a huge setback that will take, most likely, years to pay off (depending on the amount of the debt). The same can also go for states that overspend too much then they should. A balanced budget amendment to the US constitution would deny the state from going into a debt because it won’t be able to spend more than its income. This also causes the state to be cautious and smart about what they spend, otherwise a state can go into a huge debt that will create a problem in the overall economy as other states would eventually follow after as well. During times of war or if the economy is falling away from a recession of some sort, then the amendment should be changed slightly to allow for the government to take control for the best of interest.
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