Economic policy in the USA Essay Example | Topics and Well Written Essays - 500 words

Economic policy in the USA - Essay Example United States applied Keynesian approach that supports fiscal policy as the best measure to boost socio-economic growth. Fiscal policy is important in managing economy within the projections of the government (Cohen 67). United States has over time used fiscal policy at national level as the best way to enhance expansionary economic policy. For instance, increased taxation has given the country revenue to fund various sectors and more importantly initiate economic stimulus programme. Such programmes help in creating more jobs which constitute expansionary measures hence boosting the overall national income per capita. The changing socio-economic and political structure of the contemporary society has initiated free-market economy. In this regard, United States uses monetary policy through its reserve bank to regulate inflation and hence boosts its global competitiveness in trade. The theoretical tenet behind monetary policy is the free interaction of forces of demand and supply (Cohe n 120). It is also the basis of capitalism which has seen United States remain consistent in terms of global economic performance ranking. The monetary policy has also been critical to the United States considering the use of its currency as the standard of measure. This means consideration of its foreign policy on trade which depends on the strength of its currency in global market. Fiscal policy remains in force within United States towards welfare of the citizens and particularly towards provision of education and healthcare.