Yordanos Berhe

Period 7th
February 27th, 2015
Mr. White/Mr. Halterman
Economic Policies
*Note; finished project on Feb 27th, waited for partner until March 2nd for their part,
their part was never done*
The federal budget reflects choices in many ways. It determines what our tax money and
other means of federal income go towards. Below is a chart of our federal budgets discretionary
spending:

The federal budget of a country is determined yearly, and forecasts the amount of money
that will be spent on a variety of expenses in the upcoming year. The Great Recession lasted
from 2007-2009, its afterlying effects are still detectable, since many were laid-off around this
time in America. Below are federal budget spending charts ranging from the year 2007 through
2009:

(Google images)

Entitlement

spending is spending that has

to occur while discretionary spending is a spending method in which its spending is a flexible
amount. Entitlement spending affects discretionary because it is money that goes towards a
category where a certain amount is needed, so those same categories cannot have a flexible
amount flow of money, which in turn determines which categories can change their spending.
During The Great Recession, money was still being spent in the same categories, the
main difference between the spending then and now is the amount of money that was being
spent. Since it was The Great Recession, there was less tax money to be spread throughout each
category, though a similar percentage was still necessary.
Government policy decisions result in unintended consequences in many ways such as
war or a recession. When a tough situation occurs, action is what results. During the Great
Recession, some policies that came to its aid were the Community Reinvestment Act, TARP, and
the Capital Purchase Program that gave many financial institutions a lifeline when there was no
other option. (Beck)
A few beneficial government economic policies include welfare, social security, disability
funds, medicare, veterans benefits, and more. During the Great Recession, small business would

turn to the help of banks in order to get loans, in order to receive a loan from the bank; one must
first be approved by that bank to do so. If the owner of a small business, for example a local
bakery owner, needs a loan but has bad credit and was still paying off past loans to the bank, plus
interest rates, then the bank has the right to decline their application. This is still an acceptable
role by the bank today; of course, during the Great Recession, banks were being remarkably
harsh on their applicants. (Guo)
Qualifications that are used to secure the various forms of government spending include
the raising of taxes, and President Obamas and Congresses decisions. The amount the federal
government pays on interest payments depends primarily on interest rates and the amount of debt
held by the public. Other factors, such as inflation and the maturity structure of outstanding
securities, also affect interest costs (for example, long-term bonds generally carry higher interest
rates than do short-term bills). The spending that occurred during the Great Recession was the
results of the loss of jobs and small business contributions to our federal income. On the next
page are charts of spending by the government throughout the years before the Great Recession,
during the Great Recession and after:

Works Cited
Beck, Warren. "Years Brought to an End." The Antioch Review 8.3 (1948): 346-58.
How the Great Recession Was Brought to an End. Mark Zandi. Web. 26 Feb. 2015.
"Federal Spending by the Numbers, 2014: Government Spending Trends in Graphics,
Tables, and Key Points (Including 51 Examples of Government Waste)." The Heritage
Foundation. N.p., n.d. Web. 27 Feb. 2015.
Guo, Jeff. "Why Was the Recession so Much Worse for Small Businesses? Blame
Lending." Washington Post. The Washington Post, 26 Nov. 2014. Web. 27 Feb. 2015.