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Economic Policy
Economic Policy

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When governments take action in domestic and international economic arenas, such action is referred to as a particular government's economic policy. This is because, different administrations often have different views on how domestic economies should be managed and how a country such as the United States can be managed and represented best internationally.

Of course, changing international economic landscapes often determine a government's economic policy, as do the actions of international institutions such as the International Monetary Fund (IMF). However, governmental economic policy is most commonly understood as directing a country's monetary policy, levels of taxation, labor market regulations, national ownership of assets and institutions, government budgets and money supply.

Given the above, the manner in which governments approach economic policy is essential to a nation’s overall economic prosperity. A government’s strategic approach to economic policy has implications for such economic indicators as levels of unemployment, economic growth and inflation that have direct consequences on the standard of living of a nation’s population. It also affects a government’s approach to the nationalization of businesses and military spending, both of which have far reaching social consequences.

In the United States at present, economic policy is a key point of focus in the upcoming presidential elections. Many business leaders are of the opinion that the U.S. economy isn’t performing as well as if could be. At the same time, some republican and democrat groups are opposed to on going adjustments in America's debt ceiling, which mean that national debt perpetually escalates. In fact, this topic was the chief reason for the 2013 Federal Government shutdown.

Historically however, matters relating to U.S. economic policy are also steeped in controversy. Some groups and economists cite the 1999 Gramm–Leach–Bliley Act, which removed regulatory safe guards between commercial and investment banks, as facilitating the 2008 financial crisis. In the mean time, while the 2008 financial crisis occurred during a Republican president's tenure in the White House, many republicans cite the later Democratic led government as not doing enough to put the U.S. on track toward stronger economic recovery.

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