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    Government Monetary and Fiscal Policy: Tax Cuts and Economic Activity

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    In 2003, the Internal Revenue Service began to mail out refund checks because of a change in the tax law. Economic forecasters predicted that consumption and GDP would increase because of higher refunds on income taxes.

    Do you feel the tax cuts from the past few years have been successful in promoting economic growth or in preventing a deeper decline? Are there other changes to fiscal policy that you feel would have been more successful?

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    My opinion is that the Bush tax cuts do not offer much of a serious economic promotion for several reasons.

    The theory is that if the government decreases taxes, consumption will go up as people spend their tax cuts and thus improving the economy. The US economic problem is not one of too little consumption, but on too little corporate consumption in terms of ...

    Solution Summary

    My opinion is that the Bush tax cuts do not offer much of a serious economic promotion, for several reasons, discussed here in 250 words.