THIẾU HỤT NGÂN SÁCH NHÀ NƯỚC Nguyeãn Hoàng Thaéng

Noäi dung  Thieáu huït ngaân saùch nhaø nöôùc –Quan ñieåm –Phaân loaïi  Nguyeân nhaân thieáu huït ngaân saùch nhaø nöôùc  Taøi trôï thieáu huït ngaân saùch nhaø nöôùc  Nôï coâng

Tình trạng thieáu huït ngaân saùch nhaø nöôùc  Trạng thaùi chi NSNN vöôït thu NSNN trong moät khoaûng thôøi gian  Thieáu huït NSNN vaø nôï coâng coù moái quan heä maät thieát vôùi nhau  Nôï coâng laø moät con soá thôøi ñieåm. Thieáu huït NSNN laø moät con soá thôøi kyø.  Toång caùc khoaûn thieáu huït trong quaù khöù coäng doàn laïi thaønh dö nôï hieän haønh.

Top Ten National Budgets (2004) National Government Budgets for 2004 (In Billions of US$) NationGDPRevenueExpenditureExp / GDPBudget DeficitDeficit / GDP US (fed.) %-25.56%-4.07% US (state) %+5%+0.4% Japan %-24.86%-7.57% Germany %-8.33%-3.70% UK %-7.43%-2.95% France %-7.46%-3.75% Italy %-6.77%-3.25% China %-9.75%-1.94% Spain %-0.52%-0.20% Canada %+4.00%+0.67% South Korea %-3.33%-0.83% Nguồn:

Phaân loaïi thieáu huït NSNN theo thôøi gian  Thieáu huït NSNN trong ngaén haïn: –Chi tieâu coâng mang tính thöôøng xuyeân –Thueá thu chöa kòp –Vay ngaén haïn  Thieáu huït NSNN trong daøi haïn: –Trong nhieàu taøi khoaù –Cho thaáy tình traïng suy keùm cuûa khu vöïc coâng –Vay daøi haïn –Vieän trôï khaån caáp

Phaân loaïi thieáu huït NSNN theo nguoàn goác  Thieáu huït cô caáu: –Chính phuû chuû ñoäng –Chính phuû thay ñoåi chính saùch thu, chi  Thieáu huït chu kyø: –AÛnh höôûng bôûi nhöõng bieán ñoäng kinh teá mang tính chu kyø –Cuõng coù theå chòu taùc ñoäng bôûi thieáu huït cô caáu

Quan ñieåm coå ñieåm  Tieâu bieåu: Adam Smith  Noäi dung: –UÛng hoä ngaân saùch caân baèng –Choáng thieáu huït ngaân saùch vì thieáu huït NSNN ñoàng nghóa vôùi nôï naàn. –Gaùnh naëng nôï seõ doàn leân vai theá heä sau. Quan ñieåm veà thieáu huït NSNN

Quan ñieåm hieän ñaïi  Tieâu bieåu: J.M. Keynes, P.A. Samuelson  Thôøi gian:  Noäi dung: –Chuû tröông kích thích tieâu duøng –UÛng hoä thieáu huït –Caét giaûm thueá vaø taêng chi coâng –Coù theå in theâm tieàn –Taêng vay nôï Quan ñieåm veà thieáu huït NSNN

The Keynesian View of Fiscal Policy

The Keynesian View of Fiscal Policy Keynesian theory highlights the potential of fiscal policy as a tool capable of reducing fluctuations in aggregate demand. Following the Great Depression, Keynesians challenged the view that governments should always balance their budget. –Rather than balancing their budget annually, Keynesians argue that counter-cyclical policy should be used to offset fluctuations in aggregate demand. –This implies that the government should plan budget deficits when the economy is weak and budget surpluses when strong demand threatens to cause inflation.

Keynesian Policy To Combat Recession When an economy is operating below its potential output, the Keynesian model suggests that the government should institute expansionary fiscal policy, by: –increasing the government’s purchases of goods & services, and/or, –cutting taxes.

AD 1 At e 1 (Y 1 ), the economy is below its potential capacity Y F. There are 2 routes to long-run full-employment equilibrium: Expansionary Fiscal Policy Price Level LRAS Y F Y1Y1 P2P2 AD 2 Goods & Services (real GDP) Expansionary fiscal policy stimulates demand and directs the economy to full-employment SRAS 1 P1P1 –Wait for lower wages and resource prices to reduce costs, increase supply to SRAS 2 and restore equilibrium to E 3, at Y F. SRAS 2 P3P3 Keynesians believe that allowing for the market to self-adjust may be a lengthy and painful process. e1e1 E2E2 –Alternatively, expansionary fiscal policy could stimulate AD (shift to AD 2 ) and guide the economy back to E 2, at Y F. E3E3

Keynesian Policy To Combat Inflation When inflation is a potential problem, Keynesian analysis suggests a shift toward a more restrictive fiscal policy by: –reducing government spending, and/or, –raising taxes.

AD 1 Strong demand such as AD 1 will temporarily lead to an output rate beyond the economy’s long-run potential Y F. Restrictive Fiscal Policy Price Level LRAS Y F Y1Y1 P3P3 AD 2 Goods & Services (real GDP) Restrictive fiscal policy restrains demand and helps control inflation. SRAS 2 P1P1 –If maintained, the strong demand will lead to the long-run equilibrium E 3 at a higher price level (SRAS shifts to SRAS 2 ). SRAS 1 P2P2 E3E3 –Restrictive fiscal policy could reduce demand to AD 2 (or keep AD from shifting to AD 1 initially) and lead to equilibrium E 2. e1e1 E2E2

 Chính phuû vay daân chuùng goïi laø nôï beân trong (internal debt).  Nôï noäi boä khoâng taïo ra gaùnh naëng cho theá heä töông lai.  Chính phuû vay nöôùc ngoaøi goïi laø nôï beân ngoaøi (external debt).  Nôï beân ngoaøi coù theå taïo moät gaùnh naëng cho theá heä töông lai. Quan ñieåm hieän ñaïi: Lerner Quan ñieåm veà thieáu huït NSNN

Nguyeân nhaân gaây thieáu huït NSNN  Chính phuû gia taêng vai troø cuûa mình  Chi tieâu coâng gia taêng trong khi thu nhaäp coâng khoâng haún do chính phuû chuû ñoäng hoaøn toaøn.  Chính phuû chuû ñoäng ñieàu chænh cô caáu kinh teá.  Ñieàu haønh taøi chính coâng keùm hieäu löïc.  Tham nhuõng.

Taøi trôï thieáu huït NSNN  Phaùt haønh tieàn  Giaûm chi  Taêng thueá  Choáng tham nhuõng (bòt roø ræ)  Vay nôï

Taêng thueá hay vay nôï ?  Quan ñieåm lôïi ích: –Ai höôûng lôïi töø nhöõng chöông trình gaây ra thieáu huït NSNN thì ngöôøi ñoù phaûi gaùnh chòu. Neáu thieáu huït ñeå ñaàu tö cho töông lai thì neân vay nôï.  Quan ñieåm coâng baèng: –Theá heä töông lai laø theá heä giaøu hôn hieän taïi. Neân vay nôï. Hôn nöõa hieän giaù caùc khoaûn traû nôï thöôøng giaûm ñi khi thôøi gian vay ngaøy caøng daøi  Quan ñieåm hieäu quaû: –Caùch naøo ít taïo ra gaùnh naëng phuï troäi vaø quaûn lyù deã hôn thì choïn Taøi trôï thieáu huït NSNN

Vay trong nöôùc hay vay nöôùc ngoaøi?  Vay trong nöôùc: –Deã vay; AÙp löïc traû laõi thaáp (traû noäi teä; laïm phaùt, taêng thueá,…) –Quy moâ nhoû; Uy tín khoâng cao; Khoâng nhaän ñöôïc tö vaán quoác teá.  Vay nöôùc ngoaøi: –(Ngöôïc laïi)

Fiscal Policy and the Crowding-out Effect

The Crowding-out Effect The Crowding-out effect – indicates that the increased borrowing to finance a budget deficit will push real interest rates up and thereby retard private spending, reducing the stimulus effect of expansionary fiscal policy. The implications of the crowding-out analysis are symmetrical. Restrictive fiscal policy will reduce real interest rates and "crowd in" private spending. Crowding-out effect in an open economy: Larger budget deficits and higher real interest rates lead to an inflow of capital, appreciation in the dollar, and a decline in net exports.

Increase in budget deficit Higher real interest rates Inflow of financial capital from abroad Decline in private investment Appreciation of the dollar Decline in net exports Crowding-Out in an Open Economy  An increase in government borrowing to finance an enlarged budget deficit places upward pressure on real interest rates.  This retards private investment and Aggregate Demand.  In an open economy, high interest rates attract foreign capital.  As foreigners buy more dollars to buy U.S. bonds and other financial assets, the dollar appreciates.  The appreciation of the dollar causes net exports to fall.  Thus, the larger deficits and higher interest rates trigger reductions in both private investment and net exports, which limit the expansionary impact of a budget deficit.

The New Classical View of Fiscal Policy

The New Classical View of Fiscal Policy The New Classical view stresses that: –debt financing merely substitutes higher future taxes for lower current taxes, and thus, –budget deficits affect the timing of taxes, but not their magnitude. New Classical economists argue that when debt is substituted for taxes: –people save the increased income so they will be able to pay the higher future taxes, thus, –the budget deficit does not stimulate aggregate demand.

The New Classical View of Fiscal Policy Similarly, New Classical economists believe that the real interest rate is unaffected by deficits as people save more in order to pay the higher future taxes. Further, they believe fiscal policy is completely impotent – that it does not affect output, employment, or real interest rates.

AD 1  New Classical economists emphasize that budget deficits merely substitute future taxes for current taxes. Expansionary Fiscal Policy Price Level Y1Y1 Goods & Services (real GDP) SRAS 1 P1P1  If households did not anticipate the higher future taxes, aggregate demand would increase (from AD 1 to AD 2 ).  However, when households fully anticipate the future taxes and save for them, demand remains unchanged at AD 1. AD 2

Quantity of loanable funds Q1Q1 S1S1 Q2Q2 Loanable Funds Market Real interest rate r 1 S2S2 D 2 To finance the budget deficit, the government borrows from the loanable funds market, increasing the demand (to D 2 ). Under the new classical view, people save to pay expected higher future taxes (raising the supply of loanable funds to S 2.) This permits the government to borrow the funds to finance the deficit without pushing up the interest rate. Expansionary Fiscal Policy D 1 Here, fiscal policy exerts no effect on the interest rate, real GDP, or unemployment. e1e1 e2e2

Questions for Thought: 1.“When the federal government runs a budget deficit, it finances the deficit by issuing additional U.S. Treasury bonds.” -- Is this statement true? 2. When an economy is operating below its potential capacity, Keynesian economists argue that a.taxes should be raised if the government is currently running a budget deficit. b.the government should cut taxes and/or increase expenditures in order to stimulate aggregate demand. c.government spending should be cut and the budget shifted toward a surplus.

Questions for Thought: 3.The crowding out effect indicates that budget deficits … a.will stimulate aggregate demand and so exert a strong impact on both output & employment. b.will lead to additional borrowing and higher interest rates that will reduce the level of private spending. 4.“New classical economists stress that an increase in government expenditures financed by borrowing rather than taxes will lead to higher interest rates.” -- Is this statement true?

Fiscal Policy Changes and Problems of Timing

Problems with Proper Timing There are three major reasons why it is difficult to time fiscal policy changes in a manner that produces stability: –It takes time to institute a legislative change. –There is a time lag between when a change is instituted & when it exerts significant impact. –These time lags imply that sound policy requires knowledge of economic conditions 9 to 18 months in the future. But our ability to forecast future conditions is limited. Discretionary fiscal policy is like a two-edged sword; it can both harm and help: –If timed correctly, it may reduce economic instability. –If timed incorrectly, however, it may increase economic instability.

AD 0 Consider a market at long-run equilibrium E 0 where only the natural rate of unemployment is present. Timing of Fiscal Policy is Difficult Price Level LRAS Y0Y0 Y1Y1 AD 1 Goods & Services (real GDP) P0P0 SRAS 1 P1P1 E0E0 e1e1 An investment slump and business pessimism result in an unanticipated decline in AD (to AD 1 ). Output falls (to Y 1 ) and unemployment increases.

AD 1 AD 0 After a time, policymakers consider and implement expansionary fiscal policy seeking to shift AD 1 back to AD 0. But it will take time to institute changes in taxes and expenditures. Political forces will slow this process. Timing of Fiscal Policy is Difficult Price Level LRAS Y0Y0 Y1Y1 Goods & Services (real GDP) P0P0 SRAS 1 P1P1 E0E0 e1e1 Suppose that shifts in AD are difficult to forecast.

AD 0  By the time a more expansionary fiscal policy is instituted and begins to exert its primary effect, private investment may have recovered and decision makers may therefore be increasingly optimistic about the future. Price Level LRAS Y0Y0 Y1Y1 Goods & Services (real GDP) P0P0 SRAS 1 P1P1 AD 2 E0E0 e1e1  Hence, the more expansionary fiscal policy may over-shift AD to AD 2. AD 1 Timing of Fiscal Policy is Difficult

AD 1 AD 0 The price level in the economy rises (from P 1 to P 2 ) as the economy is now overheating. Thus, incorrect timing leads to inflation. Price Level LRAS Y 0 Y1Y1 P2P2 Goods & Services (real GDP) P0P0 SRAS 1 P1P1 AD 2 E0E0 e1e1 e2e2 Y2Y2 Unless the expansionary fiscal policy is reversed, wages and other resource prices will eventually increase, shifting SRAS back to SRAS 2 (driving the price level up to P 3 ). P3P3 SRAS 2 Timing of Fiscal Policy is Difficult E3E3

AD 0 Alternatively, suppose an investment boom disrupts the initial equilibrium shifting AD out to AD 2, and prices upward to P 2. Price Level LRAS Y0Y0 P2P2 Goods & Services (real GDP) P0P0 SRAS 1 E0E0 Y2Y2 Policymakers consider and eventually implement an increase in taxes and a cut in government expenditures. Timing of Fiscal Policy is Difficult AD 2 e2e2

By the time the more restrictive fiscal policy takes affect, investment may have returned to its normal rate (shifting AD 2 back to AD 0 ). Price Level LRAS Y0Y0 Goods & Services (real GDP) P0P0 SRAS 1 AD 2 In this case, the incorrect timing of the shift to the more restrictive fiscal policy to deal with potential inflation throws the economy into a recession (by over shifting AD to AD 1 ). Timing of Fiscal Policy is Difficult P2P2 e2e2 Y2Y2 AD 1 Suppose that shifts in AD are difficult to forecast. E0E0 AD 0 Y1Y1 P1P1 e1e1

Why Timing of Fiscal Policy Changes Are Difficult: A Summary Because fiscal policy does not work instantaneously, and since dynamic forces are constantly influencing private demand, proper timing of fiscal policy is not an easy task. Further, political incentives also influence fiscal policy. Public choice analysis indicates that legislators are delighted to spend money on programs that directly benefit their own constituents but are reluctant to raise taxes because they impose a visible cost on voters. –There is a political bias towards spending and budget deficits. Predictably, deficits will be far more common than surpluses. Incorrectly timed policy changes may, them- selves, be a source of economic instability.

Automatic Stabilizers Automatic Stabilizers: Without any new legislative action, they tend to increase the budget deficit (or reduce the surplus) during a recession and increase the surplus (or reduce the deficit) during an economic boom. The major advantage of automatic stabilizers is that they institute counter-cyclical fiscal policy without the delays associated with legislative action. Examples of automatic stabilizers: –Unemployment compensation –Corporate profit tax –A progressive income tax

Fiscal Policy as a Stabilization Tool: A Modern Synthesis

Fiscal Policy: A Modern Synthesis A modern synthesis view about the efficacy of fiscal policy emerged from the economic debates of the 1970s and 1980s. The key elements of that view are: –Proper timing of discretionary fiscal policy is both difficult to achieve and of crucial importance. –Automatic stabilizers reduce the fluctuation of aggregate demand and help to direct the economy toward full-employment. –Fiscal policy is much less potent than the early Keynesian view implied. –Each of the 3 demand-side models of fiscal policy is valid under some circumstances but not others. Thus, all 3 are necessary for a comprehensive view of fiscal policy.

Questions for Thought: 1. Why is the proper timing of changes in fiscal policy so important? Why is it difficult to achieve? 2.Which of the following will make it more difficult to institute discretionary changes in fiscal policy in a manner that will exert a stabilizing impact on the economy? a.the lengthy time period required for passage of a fiscal policy change under a political system with substantial checks and balances b.improvements in forecasting devices that provide information about the future direction of the economy

Questions for Thought: 3. “Both the crowding out and new classical views indicate fiscal policy is substantially less potent than the Keynesian view implies.” -- Is this statement true? 4.Automatic stabilizers are government programs that tend to: a. bring expenditures and revenues automatically into balance without legislative action. b. shift the budget toward a deficit when the economy slows but shift it towards a surplus during an expansion. c. increase tax collections automatically during a recession.

NÔÏ NÖÔÙC NGOAØI TAÏI VIEÄT NAM

Nôï nöôùc ngoaøi cuûa quoác gia  Soá dö nôï goác vaø laõi taïi moät thôøi ñieåm.  Thaønh phaàn: –Nôï nöôùc ngoaøi cuûa khu vöïc coâng (Nôï nöôùc ngoaøi cuûa Chính phuû + Nôï nöôùc ngoaøi cuûa chính quyeàn caáp tænh + Nôï nöôùc ngoaøi cuûa doanh nghieäp nhaø nöôùc) –Nôï nöôùc ngoaøi cuûa khu vöïc tö.  Do Chính phuû thoáng nhaát quaûn lyù vaø Boä Taøi chính laø cô quan ñaàu moái.  Chính quyeàn caáp tænh, cô quan nhaø nöôùc (cô quan quaûn lyù haønh chính), ñoaøn theå khoâng ñöôïc tröïc tieáp vay nöôùc ngoaøi.

Nôï nöôùc ngoaøi cuûa Chính phuû  Nhöõng khoaûn vay ODA, vay thöông maïi (vay ñeå cho vay hay ñaûo nôï) hoaëc tín duïng xuaát khaåu döôùi danh nghóa chính phuû vôùi ngöôøi cho vay nöôùc ngoaøi.  Nhöõng yeâu caàu cô baûn: –Söû duïng ñuùng muïc ñích. –Chuû yeáu duøng cho nhöõng chöông trình döï aùn coù khaû naêng thu hoài voán, traùnh söû duïng nhö caáp phaùt NS. –Tranh thuû vay öu ñaõi vaø öu tieân söû duïng chuùng cho phaùt trieån haï taàng kinh teá, xaõ hoäi. –Söû duïng caùc bieän phaùp: taùi cô caáu nôï, ñaûo nôï, vay môùi traû cuõ,… khi caàn thieát Nôï coâng

Nôï nöôùc ngoaøi cuûa Chính phuû – Nôï song phöông  Nôï tröïc tieáp theo quan heä 1:1  Nôï cuûa 1 chính phuû vôùi 1 chính phuû khaùc  Hình thöùc cô baûn laø ODA  Coù khuynh höôùng giaûm daàn Nôï coâng – Nôï nöôùc ngoaø i

Nôï nöôùc ngoaøi cuûa Chính phuû – Nôï ña phöông  Nôï caùc toå chöùc quoác teá: –Ngaân haøng theá giôùi –Quyõ tieàn teä quoác teá –Coâng ty taøi chính quoác teá –Ngaân haøng phaùt trieån Chaâu AÙ…  Nôï lieân chính phuû: –Caâu laïc boä Paris, –… Nôï coâng – Nôï nöôùc ngoaø i

Nôï nöôùc ngoaøi cuûa Chính phuû – Nôï tö nhaân  Chính phuû nôï baát kyø tö nhaân naøo mua traùi phieáu phaùt haønh ra ngoaøi nöôùc: ngaân haøng thöông maïi, toå chöùc taøi chính khoâng thuoäc chính phuû,…  Caùc khoaûn chính phuû vay ngaân haøng thöông maïi tö nhaân  Laõi suaát thò tröôøng Nôï coâng – Nôï nöôùc ngoaø i

Nôï nöôùc ngoaøi do Chính phuû baûo laõnh  Chính Phuû, thoâng qua Boä Taøi chính, cam keát baûo laõnh vay nôï nöôùc ngöôøi cho ngöôøi vay.  Khoaûn vay ñöôïc baûo laõnh  10 tr.USD. Phí baûo laõnh  1,5%/naêm.  Ngöôøi ñöôïc baûo laõnh laø toå chöùc kinh teá thuoäc moïi thaønh phaàn tröïc tieáp kyù hôïp ñoàng vay nöôùc ngoaøi vaø phaûi coù voán chuû chieám 20% toång möùc ñaàu tö.  Chöông trình/döï aùn ñöôïc baûo laõnh: –Thuoäc troïng ñieåm quoác gia –Nhaäp coâng ngheä cao cuûa döï aùn ñöôïc öu tieân ñaàu tö –Ñöôïc taøi trôï hoãn hôïp (ODA + vay thöông maïi) –Ñöôïc NH nhaø nöôùc VN thaåm ñònh vaø ñeà nghò CP baûo laõnh.

Giaùm saùt nôï nöôùc ngoaøi  Boä tröôûng, chuû tòch tænh chòu traùch nhieäm tröôùc Thuû töôùng veà giaùm saùt nôï nöôùc ngoaøi thuoäc ngaønh, ñòa phöông mình.  Boä TC, NHNN, Boä KH-ÑT vaø VP CP chòu traùch nhieäm höôùng daãn giaùm saùt vaø tröïc tieáp giaùm saùt theo chöùc naêng.  Moïi ñôn vò tieáp nhaän nôï nöôùc ngoaøi phaûi baùo caùo quyù, naêm vaø ñoät xuaát veà tình hình söû duïng.  Boä TC vaø NHNN chòu traùch nhieäm toång hôïp baùo caùo Thuû töôùng.

Nôï trong nöôùc cuûa Chính phuû – Coâng traùi daøi haïn  Treân 5 naêm  Ñöôïc huy ñoäng cho caùc coâng trình troïng ñieåm quoác gia ít coù khaû naêng hoaøn traû: Toå hôïp Khí – Ñieän – Ñaïm Caø Mau, Ñöôøng Hoà Chí Minh,…  Laõi suaát thaáp  Khoâng mang tính thò tröôøng  Giai ñoaïn 2003 – 2010 Chính phuû Vieät Nam döï kieán huy ñoäng tæ ñoàng Nôï coâng – Nôï trong nöôùc

Nôï trong nöôùc cuûa Chính phuû – Traùi phieáu kho baïc trung haïn  Treân 1 naêm ñeán 5 naêm  Ñöôïc huy ñoäng cho caùc coâng trình quoác gia coù khaû naêng hoaøn traû  Coù theå phaùt haønh ra nöôùc ngoaøi Nôï coâng – Nôï trong nöôùc

Nôï cuûa ngaønh  Ngaønh: daàu khí, cao su, deät may,…  Laõi suaát thò tröôøng  Thôøi gian treân 1 naêm Nôï coâng – Nôï trong nöôùc

Nôï cuûa chính quyeàn ñòa phöông  Ñoâ thò: Haûi Phoøng, Haø Noäi, Thaønh Phoá Hoà Chí Minh.  Laõi suaát thò tröôøng  Thôøi gian linh hoaït  Nguoàn traû nôï: soá thu ngaân saùch treân ñòa baøn. Nôï coâng – Nôï trong nöôùc

Budget Deficits and Surpluses  Changes in the size of the federal deficit or surplus are often used to gauge whether fiscal policy is stimulating or restraining demand.  Changes in the size of the budget deficit or surplus may arise from either: –A change in the state of the economy, or, –A change in discretionary fiscal policy.  The federal budget is the primary tool of fiscal policy.  Discretionary changes in fiscal policy: deliberate changes in government spending and/or taxes designed to affect the size of the budget deficit or surplus.

Supply-side Effects of Fiscal Policy

Supply-side Effects of Fiscal Policy From a supply-side viewpoint, the marginal tax rate is of crucial importance: –A reduction in marginal tax rates increases the reward derived from added work, investment, saving, and other activities that become less heavily taxed. High marginal tax rates will tend to retard total output because they will: –discourage work effort and reduce the productive efficiency of labor, –adversely affect the rate of capital formation and the efficiency of its use, and, –encourage individuals to substitute less desired tax-deductible goods for more desired non-deductible goods.

Supply-side Effects of Fiscal Policy So, changes in marginal tax rates, particularly high marginal rates, may exert an impact on aggregate supply because the changes will influence the relative attractiveness of productive activity in comparison to leisure and tax avoidance. Impact of supply-side effects: –Usually take place over a lengthy time period. –There is some evidence that countries with high taxes grow more slowly—France and Germany versus United Kingdom. –While the significance of supply-side effects are controversial, there is evidence they are important for taxpayers facing extremely high tax rates – say rates of 40 percent or above.

AD 1 What are the supply-side effects of a cut in marginal tax rates? Supply Side Economics and Tax Rates Price Level LRAS 1 Y F2 Y F1 AD 2 Goods & Services (real GDP) With time, lower tax rates promote more rapid growth (shifting LRAS and SRAS out to LRAS 2 and SRAS 2 ). SRAS 1 P 0 SRAS 2 E1E1 LRAS 2 E2E2 Lower marginal tax rates increase the incentive to earn and use resources efficiently. AD 1 shifts out to AD 2, and SRAS & LRAS shift to the right. If the tax cuts are financed by budget deficits, AD may expand by more than supply, bringing an increase in the price level.

Share of Taxes Paid By the Rich The share of personal income taxes paid by the top one-half percent of earners is shown here. During the last four decades, the share of taxes paid by these earners has increased as the top tax rates have declined. This indicates that the supply side effects are strong for these taxpayers. 30 % 28 % 26 % 24 % 22 % 20 % 18 % % 14 % Share of personal income taxes paid by top ½ % of earners Top rate cut from 91% to 70% 1981 Top rate cut from 70% to 50% 1986 Top rate cut from 50% to 30% 1997 Capital gains tax rate cut Top rate raised from 30% to 39%

Have Supply-siders Found a Way to Soak the Rich?  Since 1986 the top marginal personal income tax rate in the United States has been less than 40% compared to 70% or more prior to that time.  Nonetheless, the top one-half percent of earners have paid more than 25% of the personal income tax every year since  This is well above the 14% to 19% collected from these taxpayers in the 1960s and 1970s when much higher marginal personal income tax rates were imposed on the rich.

Fiscal Policy of the United States

U.S. Fiscal Policy,  During the 1960s & 70s, budget deficits were generally small except during recessions.  Budget deficits generally increased during recessions and shrank during expansions, primarily as the result of automatic stabilizers rather than discretionary policy changes.  Reductions in income tax rates and sharp increases in defense expenditures led to large deficits during the 1980s.

U.S. Fiscal Policy,  While increases in defense spending expanded the deficit in the 1980s, the opposite was true during the 1990s.  The deficit shrank during the 1990s and by the end of the decade federal budget surpluses were present.  The combination of the 2001 recession and the economy’s sluggish recovery, the Bush Administration’s tax cut, and increases in defense spending quickly moved the budget from surplus to deficit at the beginning of the new century.

Federal Expenditures and Revenues  The federal deficit or surplus as a share of the economy is shown here. Note the growth of budget deficits during the 1980s and the movement to surpluses during the 1990s.  A mix of factors (a recession, sluggish recovery, tax cut, & increased defense spending) have led to deficits since Source: Economic Report of the President, 2004, tables B-1 and B-79. Note, recessions are indicated by shaded bars. 18% 20% 22% 24% Expenditures Revenues Deficits Federal Government Expenditures and Revenues (as a share of GDP) 2003

Fiscal Policy & Economic Performance: The 1980s versus the 1990s  Even though the federal deficits were large during the 1980s and small during the 1990s, real economic growth was strong and the inflation rate low during both decades. – This result is consistent with the view that fiscal policy exerts only a modest impact on aggregate demand, much like the crowding-out and new classical models imply.

Questions for Thought: 1.How does the supply-side view of fiscal policy differ from the demand-side view? Does the supply-side view stress the potential of fiscal policy as a tool to smooth the ups and downs of business cycles? What does it stress? 2.“The share of personal income taxes collected from high income taxpayers has steadily declined during the last 20 years.” -- Is this statement true? 3.“Public choice theory indicates that vote- maximizing politicians severely restrain govt. spending because they have a strong incentive to achieve and maintain budget surpluses.” -- Is this statement true?

Questions for Thought: 4. The following quotation is from the mid-1980s by Paul Samuelson, a leading American Keynesian: “In the early stages of the Keynesian revolution, macro-economists emphasized fiscal policy as the most powerful and balanced remedy for demand management. Gradually, shortcomings of fiscal policy became apparent. The short-comings stem from timing, politics, macro-economic theory, and the deficit itself." Explain what Samuelson means by each of the shortcomings he refers to.

Xử lý thiếu hụt tạm thời  1.Ngân sách trung ương được tạm ứng Quỹ dự trữ tài chính của trung ương, tồn ngân Kho bạc Nhà nước theo quyết định của Bộ trưởng Bộ Tài chính; nếu còn thiếu thì tạm ứng từ Quỹ Bảo hiểm xã hội và các quỹ tài chính nhà nước khác theo thoả thuận của Bộ Tài chính với Hội đồng quản lý các quỹ này.  Trường hợp đã tạm ứng các quỹ trên mà vẫn còn thiếu, thì Bộ trưởng Bộ Tài chính báo cáo Thủ tướng Chính phủ quyết định tạm ứng vốn của ngân sách Nhà nước.  2.Ngân sách cấp tỉnh được tạm ứng từ Quỹ Dự trữ tài chính của tỉnh theo quyết định của Uỷ ban nhân dân cấp tỉnh. Trường hợp đã sử dụng Quỹ Dự trữ tài chính của tỉnh nhưng vẫn không đủ để chi trả các nhu cầu cấp thiết không thể trì hoãn thì đề nghị Bộ Tài chính xem xét tăng tiến độ cấp số bổ sung cân đối ngân sách hoặc tạm ứng từ ngân sách trung ương (nếu ngân sách trung ương có khả năng) hoặc tạm ứng Quỹ Dự trữ tài chính của trung ương.  3.Ngân sách cấp huyện, ngân sách cấp xã được tạm ứng Quỹ Dự trữ tài chính của tỉnh theo quyết định của Uỷ ban nhân dân tỉnh. Việc xem xét cho tạm ứng đối với ngân sách cấp xã, ngoài đề nghị của Uỷ ban nhân dân xã còn phải căn cứ vào ý kiến của Chủ tịch Uỷ ban nhân dân huyện. Trong trường hợp Quỹ Dự trữ tài chính của tỉnh không đáp ứng được thì có thể đề nghị cơ quan tài chính cấp trên tăng tiến độ bổ sung hoặc tạm ứng từ nguồn ngân sách cấp trên (nếu ngân sách cấp trên có khả năng).

 4.Các khoản tạm ứng để xử lý thiếu hụt tạm thời phải được hoàn trả trong năm ngân sách, trừ trường hợp được uỷ ban thường vụ Quốc hội cho phép đối với tạm ứng từ Ngân hàng Nhà nước.  5.Trường hợp đặc biệt, nếu đã thực hiện các giải pháp trên mà vẫn không đáp ứng đủ nhu cầu chi, cơ quan tài chính phải đảm bảo đủ nguồn chi trả, thanh toán cho các khoản về tiền lương và có tính chất lương, chi đầu tư xây dựng cơ bản các công trình quan trọng, chi chương trình mục tiêu quốc gia và các khoản chi mang tính thường xuyên phải chi kịp thời để đảm bảo hoạt động bình thường của cơ quan, đơn vị; đối với các khoản chi khác, sắp xếp theo thứ tự ưu tiên. Đồng thời có thể yêu cầu Kho bạc Nhà nước tạm dừng thanh toán đối với một số khoản chi về mua sắm, sửa chữa theo từng nhiệm vụ cụ thể để bảo đảm cân đối quỹ ngân sách nhưng không được ảnh hưởng đến việc tổ chức thực hiện nhiệm vụ chính được giao của đơn vị.