Supply-side economics is a macroeconomic theory postulating that economic growth can be most effectively fostered by lowering taxes,decreasing regulation,and allowing free trade. According to supply-side economics,consumers will benefit from greater supplies of goods and services at lower prices,and employment will increase. Supply-side fiscal policies are designed to increase aggregate supply,as opposed to aggregate demand,thereby expanding output and employment while lowering prices. Such policies are of several general varieties:
- Investments in human capital,such as education,healthcare,and encouraging the transfer of technologies and business processes,to improve productivity. Encouraging globalized free trade via containerization is a major recent example.
- Tax reduction,to provide incentives to work,invest and take risks. Lowering income tax rates and eliminating or lowering tariffs are examples of such policies.
- Investments in new capital equipment and research and development (R&D),to further improve productivity. Allowing businesses to depreciate capital equipment more rapidly gives them an immediate financial incentive to invest in such equipment.
- Reduction in government regulations,to encourage business formation and expansion.
The national debt of the United States is the total national debt owed by the federal government of the United States to Treasury security holders. The national debt at any point in time is the face value of the then-outstanding Treasury securities that have been issued by the Treasury and other federal agencies. The terms "national deficit" and "national surplus" usually refer to the federal government budget balance from year to year,not the cumulative amount of debt. In a deficit year the national debt increases as the government needs to borrow funds to finance the deficit,while in a surplus year the debt decreases as more money is received than spent,enabling the government to reduce the debt by buying back some Treasury securities. In general,government debt increases as a result of government spending and decreases from tax or other receipts,both of which fluctuate during the course of a fiscal year. There are two components of gross national debt:
The Congressional Budget Office (CBO) is a federal agency within the legislative branch of the United States government that provides budget and economic information to Congress. Inspired by California's Legislative Analyst's Office that manages the state budget in a strictly nonpartisan fashion,the CBO was created as a nonpartisan agency by the Congressional Budget and Impoundment Control Act of 1974.
A balanced budget amendment is a constitutional rule requiring that a state cannot spend more than its income. It requires a balance between the projected receipts and expenditures of the government.
Alice Mitchell Rivlin was an American economist and budget official. She served as the 16th vice chair of the Federal Reserve from 1996 to 1999. Before her appointment to the Federal Reserve,Rivlin was named director of the Office of Management and Budget in the Clinton administration from 1994 to 1996. Prior to that,she was instrumental in the establishment of the Congressional Budget Office and became its founding director from 1975 to 1983. A member of the Democratic Party,Rivlin was the first woman to hold either of those posts.
The United States budget comprises the spending and revenues of the U.S. federal government. The budget is the financial representation of the priorities of the government,reflecting historical debates and competing economic philosophies. The government primarily spends on healthcare,retirement,and defense programs. The non-partisan Congressional Budget Office provides extensive analysis of the budget and its economic effects. CBO estimated in February 2024 that Federal debt held by the public is projected to rise from 99 percent of GDP in 2024 to 116 percent in 2034 and would continue to grow if current laws generally remained unchanged. Over that period,the growth of interest costs and mandatory spending outpaces the growth of revenues and the economy,driving up debt. Those factors persist beyond 2034,pushing federal debt higher still,to 172 percent of GDP in 2054.
Fiscal conservatism or economic conservatism is a political and economic philosophy regarding fiscal policy and fiscal responsibility with an ideological basis in capitalism,individualism,limited government,and laissez-faire economics. Fiscal conservatives advocate tax cuts,reduced government spending,free markets,deregulation,privatization,free trade,and minimal government debt. Fiscal conservatism follows the same philosophical outlook as classical liberalism. This concept is derived from economic liberalism.
Peter Richard Orszag is an American business executive and former government official. He is the Chief Executive Officer of Lazard.
The history of the United States public debt began with federal government debt incurred during the American Revolutionary War by the first U.S treasurer,Michael Hillegas,after the country's formation in 1776. The United States has continuously experienced fluctuating public debt,except for about a year during 1835–1836. To facilitate comparisons over time,public debt is often expressed as a ratio to gross domestic product (GDP). Historically,the United States public debt as a share of GDP has increased during wars and recessions,and subsequently declined.
The economic policy and legacy of the George W. Bush administration was characterized by significant income tax cuts in 2001 and 2003,the implementation of Medicare Part D in 2003,increased military spending for two wars,a housing bubble that contributed to the subprime mortgage crisis of 2007–2008,and the Great Recession that followed. Economic performance during the period was adversely affected by two recessions,in 2001 and 2007–2009.
The phrase Bush tax cuts refers to changes to the United States tax code passed originally during the presidency of George W. Bush and extended during the presidency of Barack Obama,through:
The Hamilton Project is an economic policy initiative within the Brookings Institution. It was originally launched in April 2006 by a combination of public policy makers,business people,academic leaders,and other former Clinton administration economists and experts. The Hamilton Project "seeks to advance America’s promise of opportunity,prosperity,and growth." It went dormant after U.S. President Barack Obama assumed office in 2009,because many of its members left to work for the White House,but in 2010,it was relaunched with Michael Greenstone as the new director.
Lawrence Alan Kudlow is an American conservative broadcast news analyst,columnist,journalist,political commentator,and radio personality. He is a financial news commentator for Fox Business and served as the Director of the National Economic Council during the Trump Administration from 2018 to 2021. He assumed that role after his previous employment as a CNBC television financial news host.
The Committee for a Responsible Federal Budget (CRFB) is a non-profit public policy organization based in Washington,D.C. that addresses federal budget and fiscal issues. It was founded in 1981 by former United States Representatives Robert Giaimo (D-CT) and Henry Bellmon (R-OK),and its board of directors includes former Members of Congress and directors of the Office of Management and Budget,the Congressional Budget Office and the Federal Reserve.
The economic policy of the Barack Obama administration,or in its colloquial portmanteau form "Obamanomics",was characterized by moderate tax increases on higher income Americans designed to fund health care reform,reduce the federal budget deficit,and decrease income inequality. President Obama's first term (2009–2013) included measures designed to address the Great Recession and subprime mortgage crisis,which began in 2007. These included a major stimulus package,banking regulation,and comprehensive healthcare reform. As the economy improved and job creation continued during his second term (2013–2017),the Bush tax cuts were allowed to expire for the highest income taxpayers and a spending sequester (cap) was implemented,to further reduce the deficit back to typical historical levels. The number of persons without health insurance was reduced by 20 million,reaching a record low level as a percent of the population. By the end of his second term,the number of persons with jobs,real median household income,stock market,and real household net worth were all at record levels,while the unemployment rate was well below historical average.
Robert Danton Reischauer is an economist and was one of the two public trustees of the Medicare and Social Security Trust Fund. He is a nationally known expert on the federal budget,health reform,Medicare,and Social Security. Most recently (2000–2012) he served as president of the Urban Institute,a think tank based in Washington,D.C. He is the son of Japan scholar Edwin O. Reischauer.
Political debates about the United States federal budget discusses some of the more significant U.S. budgetary debates of the 21st century. These include the causes of debt increases,the impact of tax cuts,specific events such as the United States fiscal cliff,the effectiveness of stimulus,and the impact of the Great Recession,among others. The article explains how to analyze the U.S. budget as well as the competing economic schools of thought that support the budgetary positions of the major parties.
Deficit reduction in the United States refers to taxation,spending,and economic policy debates and proposals designed to reduce the federal government budget deficit. Government agencies including the Government Accountability Office (GAO),Congressional Budget Office (CBO),the Office of Management and Budget (OMB),and the U.S. Treasury Department have reported that the federal government is facing a series of important long-run financing challenges,mainly driven by an aging population,rising healthcare costs per person,and rising interest payments on the national debt.
Karen Dynan is an American economist who is Professor of the Practice of Economics at Harvard University and a Non-resident Senior Fellow at the Peterson Institute for International Economics. She previously served as the Assistant Secretary of the Treasury for Economic Policy and Chief Economist of the United States Department of the Treasury,having been nominated to that position by President Barack Obama in August 2013 and confirmed by the U.S. Senate in June 2014. From 2009 to 2013,Dr. Dynan was the Vice President and Co-director of the Economic Studies program at the Brookings Institution. Prior to joining Brookings,she served on the staff of the Federal Reserve Board for 17 years. Dr. Dynan is an expert on macroeconomic policy,consumer behavior,household finance,and housing policy.
The economic policy of the Donald Trump administration was characterized by the individual and corporate tax cuts,attempts to repeal the Affordable Care Act ("Obamacare"),trade protectionism,immigration restriction,deregulation focused on the energy and financial sectors,and responses to the COVID-19 pandemic.
