Barack Obama’s $ 350 Billion Request in Relation to Fiscal Policy

The promulgation of recession by the United States of America has been the authoritative indicator that the country is indeed very very much affected by the global financial crisis. The country is facing difficulties in many beas especially when it comes to the space of their parsimony. This is clearly exemplified by an article that features chairperson-elect Barack Obama urging the likeness back to allow his governance to handling the other $ 350 cardinal of the $ 700 billion rescue package.The main objective of the Obama administration is to use the $ 350 billion of financial bailout funds to champion the Main Street more(prenominal) rather than the breakwater Street. This amount of money pass on become purchasable to the Treasury Department within the span of 15 days unless the Congress will pass a law to prevent it (Kelley and Fritze). However, some Republi fuels clearly fence the plan to spend more. They justified such rig with their perspective that such pl an will non be issuanceive. These Republicans asserted that they will only repre direct the disbursement if there are assurances that the money will not be mis spent.There are excessively some American citizens who are also unbelieving about Obamas plan because of the mismanagement of the world-class $ 350 billion during the Bush judicial system. On the other hand, those who yield Obamas take understand the weariness of the deal but they encourage them not to prevent the Obama Administration to use the funds because of their disappointment with the previous administration. President Obama sought to reassure the Congress by smart them that there will be transparency to the act upon and more money will be tell to words the foreclosure crisis.This is in support with the letter sent by Obamas economical adviser Lawrence Summers to the congressional leaders that the countrys fragile economy entails them to act both quickly and wisely (Kelley and Fritze). The economic prin ciple applicable to this article is fiscal insurance. monetary policy pertains to the deliberate changes in government spending and tax collections designed to achieve full employment, jibe inflation, and encourage economic growth (McConnell and Brue 214).In relation with this, the request of President Obama for $ 350 billion exemplifies fiscal policy. The positioning of the country under which the President made this request is in time of recession. It is said that fiscal policy is most applicable in such material body of economic condition. During time of recession, an expansionary fiscal policy is a doable way to address the problem. A possible reason behind the occurrence of recession is that the dough expectations on investment project have dip which curtailed investment spending and decreased gist demand.In this case, the federal government has three main options that it can use in order to stimulate the economy. These options are (1) Increase government spending, (2) reduce taxes, or (3) use some combination of the two (McConnell and Brue 215). It is quite apparent that President Obama opted to choose the first option, which is change magnitude in government spending. A sufficient accession in the spending of the government can aid in pushing the economy out of recession.This will address one of the problems in times of recession because increased government spending will also increase entirety demand. Nevertheless, the initial increase in aggregate demand is not the end because the multiplier effect will increase the original money spent by the government. The greater shift in the aggregate demand curve ascribable to the multiplier routine that magnifies the initial variation in spending into more successive rounds of new consumption spending (McConnell and Brue 215-216).Lastly, the governmental considerations that are observable in the article are also a part of implementing fiscal policy. This is due to the fact that fiscal policy is c onducted in the policy-making environment. As a result, economic considerations might be taken aside because of political concerns. It is also a common practice for politicians to rationalize actions and policies that are ripe to ones interest (McConnell and Brue 223). This is clearly proved by the opposite poles that the Republicans and Democrats have with regards to this issue.