Poverty and the US Economy Essay

Today, at that place argon developed, emerging and developing countries in the world. A larger percentage of people get laid under extreme want in approximately developing countries. In most developed countries exiguity exist, but a impose proportion. Most developing countries form policies either pecuniary or pecuniary to constrict the prevalence of impoverishment. However, on that point is no country without a insurance indemnity options for excretory product penury. In a broader sense, poverty passelnot be eradicated, but can be lessen to a certain take aim. This is wherefore countries argon act several(a) polices that could help hack poverty in their region.Fiscal and pecuniary policies are the primary(prenominal) tools implementd in formulating various st markgies, actions that aim to bowdlerise poverty. This hold out leads us to poverty issue in the fall in States of America. Then, what are the various policies that can be handlingd to eliminate po verty in the country. Should the form _or_ system of organization makers make enforce of monetary or monetary policy? Subsequently, what policy tools give be used, monetary or monetary? In this salvage up at that place go a instruction be a comprehensive analysis on what policy option that should consec enjoined to eliminate poverty in the USA.To begin with, understanding what pecuniary and monetary policy entails is necessary. Then, what is monetary policy? In a simple term, pecuniary policy refers to an exertion by the politics to manage, influence and guide the tempo or direction of the preservation by using its major tools revenue enhancement and its conglomeration disbursement. thither are two major tools of monetary policy, which are imposeation and governance expenditure. In addition, there could be contractionary or expansionary pecuniary policy. Expansionary monetary policy here message when there is amplification in governing body spending or reduction in taxation.This normally leads to budget shortage and criminality versa. While, monetary policy refers to an effort by the governing body to change the pace of the frugality by influencing or controlling the bills supply and refer rates. These various policies are act ond by establishment in former(a)(a) to get through the basic sparing objectives of full employment, stability in terms level and growth of the economy. However, in the US the monetary or monetary policies throw to be enacted in other to reduce or eliminate poverty. In acting this task, different things keep back to be compose in their rightful place.Even though, poverty cannot be eliminated from the country yet with a actually proficient fiscal and monetary policies it proportion could be reduce. The reason why I believe poverty cannot be completely eliminated is because of the office economy and rural area evolves. From cadence immemorial, there have been around certain segmentati ones of people in the economy. They footslog from speeding berth, middle and commence kinsfolkes. In twain economy, there entrust always be the lower class and this comprises of the people keep below the poverty line.In addition, there get out always be those at the receiving end. Africa can be a very good example of this issue. Therefore, there is way how we would not have poverty in any nation. What can only be done is to reduce drastically the number. In country like the US, the poverty rate can be reduced to a small level if giving medication pursues good monetary and fiscal policies. The presidency could enact fiscal, monetary policies and both together in the economy to reduce the poverty rate. These would be explained as followsFirstly, we are going to mete out the fiscal policy. Since, our main aim is to reduce the level of poverty. The judicature activity could pursue both the contractionary or expansionary fiscal policy. However, global fiscal crises have an overall effect on the nations economy. Moreover, the US government could enact contractionary policy to reduce the level of inflation. Since, the tools of fiscal policy are taxation and government spending. The government should reduce its spending and growing the tax of the elite and the upper class in the nation only.When this is done, the government will have more gold, which could be spent on increase the summation get of the lower class or people living below the poverty line. In a way the substantive income of the lower class will be increased through this policy, since the funds will be redistribute from the rich to the poor. In a way, there is the effect that fiscal policy has on the nation at large and on the individual as a whole. In as very much as our focus relates to individual then, we pursue those action that will be good to the individual rather than the whole nation.In addition, when government pursue budget dearth the economy is receiving less than what i ts expend. In this case, the government will have to finance this deficit using different approaches. They could borrow the worldly concern or sell summations. Sale of asset may include the sale of bonds and exchequer bills in other to ball carrier the deficit. exchequer bills and bond are example of government tools use to reduce the money in circulation. Government sells these to the public in other to remove money in circulation.This money ask will be gotten from the upper class or the rich by change magnitude their tax. On the other hand, an expansionary fiscal policy could as well as be enacted. Here, the government should reduce the tax of the lower class and government should increase their spending on economic activities that could increase aggregate demand of this lower class and result in increased productiveness. When government takes this action, the real income or the disposable income of this class of people would increase and thereby increasing their purchasing power. abandoned that, disposable income is the income that is left for spending when tax has been removed from income. In addition, when government increases their spending they pursue budget deficit. Here, they should incur these funds on economic activities that could increase the productivity and aggregate demand of the lower class. When there is increase in government spending, it agent that the government is redistributing its asset to its populace. Thereby increasing total productivity in the economy and steer to increase in total income.This increase in total income will trickle blue to the lower class and increase their disposable income. In essence, when government pursues the basic economic objective, they will be solving the issue of eliminating poverty indirectly. Therefore, the government could use fiscal policy in reducing the level of poverty in the nation However, the government in pursuing this objective of eliminating poverty can also use monetary policy. They could also use expansionary monetary policy. In a way, contractionary monetary policy will not be trenchant in achieving this objective.When they wish to use expansionary policy, the government should influence the interest rate by reducing it using its various tools. When this happens, investment will increase principal to increase in productivity that will trickle down to the lower class. Since, increasing productivity more labor effort would be require in achieving this. Then, there will be increase in employment that will trickle down to the lower class. In a way, more people will be utilise and this will include the lower class.This stead will increase the real income of the lower class and will enable them peppy above the poverty line. However, the contractionary monetary policy will not be effective in this case. Since, under this policy there will be reduction in the rate of interest and consequently leading to decrease in productivity. When productivity is reduced, it intend inventory is reducing and companies are dismissal workers and this most times affects the lower class. Therefore, this will further worsen poverty occurrence in the country and contributing to increase in the level of unemployment.In some other way, the government could combine both fiscal and monetary policies in other to achieve their objective of eliminating poverty in the country. What is needed is the right combination in other to guide against inflation. The government could influence the interest rate and at the same time enact policy that would make lower income earners pay reduce tax or used to offset the feedback from these policy option. The government could also combine expansionary monetary and fiscal contractionary policies in a way to offset any feedback from this policy options.In conclusion, there are ways the government of the United States of America could use to eliminate poverty. However, we should have it in mind that poverty cannot be eliminated per manently in the country. It could only be reduce to its barest minimum. In a way, the government actions are very vital. The two main policies to be enacted are the monetary and the fiscal policy. Finally, I think the global financial crises have a way of influencing the way these policies will work.