Fiscal Policy Is the Regulation of Income and the Return of Powers Essay Example

The United States government manages money to support the citizens of its country. The support can be affected by a surplus, deficit, or substantial debt; which affects production, domestic affairs, and international trade. Understanding how each variable interacts with another, the debt, deficit and surplus must be analyzed.

To understand how the debt, deficit, and surplus can affect the United States economy, one can start with evaluating Gross Domestic Product (GDP); the total value of what the country produces in goods and services (Colander, 2010). When a country has a surplus, the country can lower its deficits from other periods and possibly reduce the tax burden on its citizens. When the country has a budget deficit it deflates the GDP because money earned from what the country produces will be lost in, paying back the d