Sample Economics Essays on The Fiscal Ship

The fiscal ship helps to plan the government’s budget allocations using fiscal policies of taxation and government spending. Moreover, the game is essential for the learner to understand how the central government functions in relation to laws passed by the states.

Question 1

The game aims to reduce the federal debt by 2045. As such, my main priorities were to reduce government spending, promote equality, and combat climate change.  Hence, my main revenue choices were implementing a carbon tax, increasing the corporate tax from 21% to 25%, and eliminating itemized deductions. In contrast, my main spending choices included: reform the food stamp program, reduce infrastructural spending, and cut social security COLA. Since federal debt is largely attributed to huge government spending, my main objective was to reduce the size of the government in the economy while promoting equality. Per economic priory, economic growth can only be achieved when a country’s inequality range is low.

Question 2

I was able to reduce the debt significantly by achieving a 100% performance against the set target in the fiscal ship. I focused on reducing government size in the economy while encouraging investments by eliminating unnecessary taxes. For example, I cut spending on homeland security and law enforcement. Moreover, I plan to reduce both federal employee pensions and federal employment through attrition. In doing so, the country’s borrowing level will decline as it will be inclined towards capitalism. As such, the revenues collected will sufficiently cover the expenses projected in the budget.

Question 3

The major objectives in my plan may face mixed reactions in the current House and the Senate. First, the plan to reduce inequality can be supported by both houses since it aims to increase the minimum wage to $15 from the current $ 7.50, and eliminate tax caps on income above $135,000.  Currently, inequality is rampant in the country despite congressional laws to mitigate the vice. Per the Supreme Court, the case filed in 1964 by an Atlanta appellant motel to stop congressional law advocating for equality shows that standardization of laws governing equality with regard to race, social class, or color lacks in the country. Therefore, federal equality laws will help to increase the weight of the state laws.

Secondly, all the states may support the implementation of the carbon tax because climate change affects each state’s economic performance. In contrast, the aim to increase corporate tax may be rejected by highly-taxed states, such as New York, because the sources of revenue collection in such states are stretched to the limit.  Lastly, the proposal to cut federal expenditure on infrastructure may neither pass the current House nor the senate. The rejection may result from the reliance of states on federal funding to construct infrastructure within the states despite each state having different infrastructural plans from the central government. Therefore, harmonizing state and federal plans will be necessary to achieve a debt reduction by 2045.

 

Reference

Heart of Atlanta Motel, Inc. v. United States et al.: Appeal from the United States District Court for the Northern District of Georgia. No. 515. U.S. Supreme Court: Atlanta Motel v. the United States, 379 U.S. 241(1964).