Four Things the Government can Do to Improve the Economy

Improving the economy is no easy task. When a recession hits it often takes several months or even years to get back on track. For this reason there are government policies to help bring things back into balance.  These are known as monetary and fiscal policy.

Fiscal policy is the ability of the government to collect taxes and to regulate government spending. Monetary policy has to do with the Federal Reserve Board’s ability to regulate the money supply and interest rates.

With these tools here are four things the government can do to improve the economy:

1. Setting a low interest rate at which qualified borrowers can obtain a loan or mortgage. This will help to improve the real estate market, as well as the amount of money that lenders are giving out.
2. Government spending is out of control causing the national debt to continue to soar. Although the new powers-to-be are talking about cutting the national debt they need to back up their words with action in the months to come. The question is: how much more can the government borrow until credit markets become alarmed?
3. Create jobs. This is one area that President Obama is adamant about addressing as soon as possible. He has big plans for creating millions of green jobs in the next couple of years. Any plan that creates jobs and lowers the unemployment rate is one that will definitely help the economy to thrive once again. New jobs also help to boost the amount of taxes the government is collecting.
4. Cut capital gains tax in order to bring back investors who have tightened up. The ability to earn tax free profits will not only bring back investors, but it will show others the benefits of getting involved.

It is important for government policy makers to weigh the pros and cons of each and every option, and then decide which ones are best for the economy and the country as a whole.

It goes without saying that everybody, qualified or not, has an opinion on how the government can fix the economy. The above are four common ideas shared by millions of Americans. It will be interesting to see if the government agrees, and eventually decides to implement one or all of these plans.