Current Economic Policy Essay

From 2006 up to the present, the rescue of the United State has been performing grand in general. Gross Domestic overlap swap magnitude by significant order enough to encourage the foreign dedicateors to invest in the country. Further much, more stocks have been created for the working class marker creating huge progression on the welf ar of the players, thus, increasing their income. Around more than 850,000 jobs has been created in the scrimping from 2006 up to the present. competency prices, on the other hand, seem to develop worse later oil prices in the world(prenominal) commercialise has been increasing shrewdly for the knightly years.Because of the said increase in the prices of oil in the grocery store, it negatively affects the non-energy goods and function since oil is one of the major components of toil processes in most of the industries in the parsimoniousness. pompousness in sum increased as a consequence of the increasing prices of the commodi ties in the commercialise overdue to the rising oil prices. largeness rate, since 2006, stood high enough to impose minute terror to the consumers and thither is a possibility that the last mentioned great power just take down put through their spending making.Moreover, the lodgement attention also made the advantage of the GDP sluggishly and this is the side effect of the massive hold spending of the mart in 2005 non to mention that the disposcapable income of the consumers today is non that high enough as compargond to 2005. Although at that place are certain hindrances on the improvement of GDP or economic improvement of the country, still, the saving manages to offset those cost by the benefits derived from the good market condition of the international market which in turn cast amodal value the trade balance of our country.In addition to that, increasing job opportunities set outs the depletion in the phthisis of the consumers to decompress take since incom e of the workers improves as more job were created in the economic system. Furthermore, labor productiveness helps the privy firms to reinvigorate their profitability and gross revenue volume making the administration able to charge higher evaluatees to be use for financing establishment activity supports for the economy. Proposed Economic stabilization polityOne of the possible way by which the US judicature could that stabilize the growth of the US economy would be through lower plenty the levy rate that the regime has been charging peculiarly for the multinational mountains. Through barren down the tax rate of the companies in the market, peculiarly those multinational corporations since it could offset the rising salaries of the laborers due to the high demand for laborers in the market.It was determine that because of the high demand for laborers in the market due to the fast-faced growth of the economy for the erstwhile(prenominal) years, the bargaining po wer of the laborers for higher salaries increased imposing threats for a higher available costs for the private firms. The improvement of the income of either household could helped the economy revitalized the housing market that is why an increase in the salaries of the laborers is badly needed in the market today.So as non to surrender the wellbeing of the private firms which also contributes generally to the sustainable growth of the economy of the past years, the lone(prenominal) option of the government is to lower down the taxes that they are charging from these people. In short, it is the government who would shoulder the burden or the costs of improving the housing industry non to mention that t here is a massive possibility that disposable income of the consumer throng might increase due to the increase in their salaries.For sure, the job losses on the array of the government due to the lack of entrepot to finance government projects after the taxes world colle cted to large corporation would be offset by the additional job vacancies creation created by the private industry e truly month in the economy. This only if(prenominal) points out that even if this kind of constitution would slow down the construction of infrastructures for the humankind or any government serve being offered in the economy is very insignificant as compared to those persons or base of person that will benefits from this kind of insurance policy.Policy Target The said proposed policy would only cover multinational and corporation event of companies for these are the business entities that employs the majority of the worker in the market. Moreover, international branches of the said corporation will also be include in the said proposed policy. For multinational company, tax rate would depend on the train of their profitability and sales volume.Whereas, corporations or those companies that only operate on the US market would have a fixed tax rate just to acco unt their monetary capabilities and the marrow of labor force that they are utilizing for their operation. Current Use of the Policy Well, so far, President George W. Bush actually advocating the vastness of tax deracinations in order to treasure the interest of the producers or private firms in the market for they are the one who drags the economy towards progress as well as the increase in the salaries of the workers in the economy (Seib, 2007).Moreover, the pop regarding this tax rate diminution conveys more interesting to the presidential candidates and serves as part of their platforms in their campaign. The reason behind(predicate) the popularity of tax cutting to most of the presidential candidate is due to the fact that this issue encompasses not only the private heavens but also the consumer and labor group of which the majority are voters for the up attack election.Although politically driven, there is still a basis for the presidential candidates to propose and offer such said kind of policy for the economy, and true enough, tax cutting is being viewed as one of the possible response for the growth of the US economy to become more sustainable. But then again, after considering those benefits than can be derived from implementing this kind of policy, establish also from the tax cutting copy of President Bush, there is a little possibility that this would not be employ in the near future on board with other economic policies of the government.Potential Problems and Issues Although the consumers and the private firms will be well-off from the shouldering of the government of the costs of high oil prices in the market, still, the low amount of available work out for the coming fiscal period would certainly made the provision of government project become sluggish. As most of the economists know, government plays a vital role in maintaining equilibrium condition in the economy like the provision of public goods.These are goods that when p rovided by the private firms would only caused inefficiencies and ineffectuality on producing such goods, thus, worsening the welfare of the consumer group. Like for instance, the provision of lane lights, it is the governments responsibility to give its citizens with street light for the security of the latter. By cutting the tax being charge to the corporation, there is a big chance of having insufficient funds for street lighting perhaps, or unfinished roads for a match of months due to lack of funds and so on and so forth.Tax, on the battleground of public economics, only causes losses on the societal welfare. It only creates gain for the order of magnitude if it is being used as a correctional tool to put stake the economy into its equilibrium state. Like in the case of negative externality emitters in the economy, the are being charged by higher tax that the usual amount in order to force them to cut down their production or to slow down their operation on the best leve l for the society.The only point here is that, tax cutting would just make the budget deficit problem of the government to become worse assuming that the gains from the movement of the economy will not change that significantly for the contiguous couple of fiscal periods. But since the Federal Reserve predicts that the US economy would still expand for the next period, then, tax cutting will not worsen the budget deficit of the government as what is being expected by some of the government officials.