Fiscal policies of president Bush and president Obama Essay

Introduction

Known as the most successful economy in the globe, the United States has come a long way to achieve its economic prowess. The country is a fairly new economy compared to the rest of the super powers making its case unique.

The United States is known for its aggressive and hard working nature due to its political and economic policies. The policies place emphasis on a democratic system of governance that allows for an immense amount of freedom in all aspects of life.

These policies have proved to be an advantage to the growth and sustainability of the country. Despite the spiraling rate of economic growth, the country records a number of economic down turns that have threatened the future sustainability. This has as a result led in implementation of a number of economic bailouts so as to increase the viability of the economy in the long run (Wright, 2010).

One of the most discussed fiscal policies is that of George. W. Bush Jr. despite his allegiance to the Republican Party, most of his policies are inspire by President John F. Kennedy.

One of the areas where Bush placed emphasis is the federal income tax cuts. At this time the country was highly taxed which in turn, affected the essential functions such as disposable income, the borrowing rate and the investing capability of the nation.

The change in the tax cuts enabled individuals to use their extra income to pay off debts and save money in the bank. This turned the economy around owing to the level of growth in terms of the economic strength.

Another significant element of his fiscal policy was the allocation and distribution of the national resources to different sectors. The government invested the funding of the army which at this time was heavily populated in the Middle Eastern countries.

This affected the rest of the vital sectors such as health, education, food, housing and internal security. The policy has served as a disadvantage to the economy recording one of the lowest rates of economic growth. This low performance reached its peak in 2008 when the country’s performance recorded an all time low causing a recession across the globe (Wright, 2010).

President Obama made news as the first African American to become president of the United States. His economic policy has as a result become highly scrutinized so as to compare his policies to that of his predecessor. One of the areas that Obama chose to concentrate on was the general welfare of the economy.

The government reduced the funding of the army redirecting the finances to healthcare, education and housing. This reduced the strain on the public who had become heavily tasked so as to meet the demands of the army.

Obama ensured that the central bank reduced their interest rates on most of the charges so as to release the money to the public. This however is closely monitored so as to regulate some of the policies in the event that there is a colossal circulation of money amongst the public.

This varies from Bush’s policies that did not place emphasis on regulation of the money by the central bank. The current regime is thus more observant so that the country does not experience another recession in the future (Wright, 2010).

Conclusion

President Bush’s fiscal policy is highly concentrated on investment in sectors such as the army and tax cuts making the country lack funding in other sectors. The tax cuts however increased the disposable income of the public increasing the level of investment. Obama on the other hand focuses on the welfare of the general economy redirecting the funds to crucial sectors such as health education and housing.

References

Wright, R. E. (2010). Bailouts: Public money, private profit. New York: Columbia University Press