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Fiscal Policy Paper

The United States federal deficit is continually contracting or expanding depending on how expenses paid match up to incoming revenues. A government policy which implements either expansionary policy greatly influences the size of the deficit as well as any surpluses gained.

Because deficits and surpluses are such an integral part of our economy, the way they affect almost every sector of our lives can be far reaching and long lasting. In this paper we will evaluate some general side effects of having either a surplus or a deficit and how they affect specific areas of our lives.


If the economy is in a recession, taxpayers have a budget with minimal amount of money to spend on goods or services. The tax rates change because of the number of employed individuals working in a year. If the economy is going