Fiscal Policy

Clear Target Students will be able to explain how fiscal policy is used to influence our economy.

Fiscal Policy The federal government’s use of taxation and spending policies to affect overall business activity.

Expansion vs. Contraction Expansionary policies use taxing and spending to make money more easily flow through the economy. Contractionary policies use taxing and spending to slow the flow of money through the economy.

Social Programs welfare subsidies designed to aid the needs of the U.S. population. Head Start Social Security Disability Social Security Retirement and Survivors Benefits Supplemental Security Income (SSI) Medicaid Medicare Welfare (Temporary Assistance for Needy Families, or T.A.N.F.) G.I. Bill Veterans' benefits Pell Grants Unemployment Insurance Food Stamps Government Subsidized Housing Home Mortgage Interest Deduction Hope and Lifetime Learning Tax Credits Child and Dependent Care Tax Credit Earned-income tax credit Employer subsidized health insurance Employer subsidized retirement benefits Federal student loans

Social Security Provides subsidies to help cover living costs for people of retirement age. Started in response to the large number of elderly affected by the Great Depression.

Medicare Provides medical insurance for people of retirement age.

Medicaid Provides medical insurance for people under retirement age based on financial needs.

Public Goods Goods or services that can be used by many individuals at the same time without reducing the benefit each person receives.

Externalities Economic side effects that affect an uninvolved third party.

Externalities Positive GPS Microwave Flu shots Smoking Negative Water pollution Air pollution Power reduction Smoking

National Deficit When the government’s planned spending is greater than its ability to collect revenue.

National Debt The federal government's total outstanding debt.