Fiscal Policy

• The 2011 US debt ceiling crisis was one of a series of recurring debates over the increase in the overall size of the US government debt.

• The 25% rule is a heuristic that can refer to either public finance law or intellectual property law.

• Section 501(c) of the Internal Revenue Code defines certain types of organizations as tax-exempt - they do not pay federal income tax.

• The principle of ability to pay states that those who are more able to pay taxes, measured by income and wealth, should pay more.

• Salvation is the injection of money into a business or organization that would otherwise face inevitable collapse.

• A balanced budget occurs when revenues equal or exceed total expenditures.

A budget surplus is when revenues exceed spending.#

• B2G, or business to government, is the provision of goods and services to government agencies at the federal, state, and local levels.

• The crowding-out effect suggests that an increase in public sector spending leads to a decrease in private sector spending.

• A spending deficit occurs when government spending exceeds its revenues.

• Deflation is a general decrease in the level of prices for goods and services.

• Double taxation means that income tax is paid twice from the same source of income.

• Purpose is the process by which people or organizations allocate certain money for certain purposes.

• Economic efficiency is when every scarce resource in the economy is used and distributed between producers and consumers in such a way as to provide the greatest economic return and benefit to consumers.

• Economic integration or regional integration is an agreement between countries to reduce or eliminate trade barriers and harmonize fiscal policies.

• The Recovery Tax Act of 1981, signed into law by Ronald Reagan during his first year in office, was the largest tax cut in US history.

• Economic stimulus refers to targeted fiscal and monetary policy aimed at obtaining an economic response from the private sector.

• Medium-term euronote (EMTN) is a medium-term flexible debt security that is issued and traded outside the United States.

• The Fed’s balance sheet is a list of assets and liabilities of the Federal Reserve.

• The financial system is the collection of global, regional or firm-specific institutions and practices used to facilitate the exchange of funds.

• The government creates a budget deficit by spending more money than it receives from taxes and other revenues, with the exception of debt.

• The Foreign Account Taxation Act (FATCA) requires US citizens to file annual returns on any foreign accounts and pay any taxes due on them in order to curb tax evasion.

• Free trade agreements reduce or remove barriers to trade across international borders.

• Generation Skip Transfer Tax (GSTT) is a federal tax that arises when property is transferred by gift or inheritance to a beneficiary (other than spouse) who is at least 37.5 years younger than the donor.

• The “golden rule” of public spending is fiscal policy, which says that the government should increase borrowing only in order to invest in projects that will pay off in the future.