Final Project Milestone Two: Fiscal Policies
Real rates and the sudden impact of oil and mortgage prices rolled affected the1980’s (Nelson, E, 2004).
Paul Volcker, Chairman of the Federal Reserve and actions of the FMOC on August 6, 1979 led to the recession of the early 80’s (Walsh, C, 2004)..
In 1980 the Depository Institutions Deregulation and Monetary Control Act was signed into law (Robinson, K, 2013).
President Reagan in 1981 proposed a dramatic shift in economic policies designed to reduce inflation and increase economic growth (Congressional Budget Office, 1981).
Fiscal Policy Actions
Economic Recovery Tax Act of 1981
Emergency Deficit Control Act of 1985
Tax reform act of 1986
Fiscal Policy Impact
The Economic Recovery Tax Act of 1981 lowered the top marginal tax rate from 70 percent to 50 percent and reduced other marginal tax rates across the board by 23 percent over a three-year period.
After the balanced Budget and Emergency Deficit Control Act (The Gramm-Rudman-Hollings Act), was signed into law by President Reagan in December 1985 it had immediately forced congress to act against the federal budget.
The Tax Reform Act of 1986 had both short run and long run Impacts.
Auerbach, Allen & Slemrod Joel (June 1997) Journal of Economic Literature Vol. XXXV, pp. 589-632. The Economic Effects of the Tax Reform Act of 1986. Retrieved from, https://eds-a-ebscohost-com.ezproxy.snhu.edu/eds/pdfviewer/pdfviewer?vid=3&sid=d56a2ceb-7138-4a64-96ec-46d0f60864e6%40sdc-v-sessmgr03
Eissa, Nada (January 1996) Labor Supply and the Economic Recovery Tax Act of 1981. Retrieved from, https://www.nber.org/chapters/c6235.pdf
Library of congress (n.d) S.1702 – Balanced Budget and Emergency Deficit Control Act of 1985, S.1702 — 99th Congress (1985-1986). Retrieved from, https://www.congress.gov/bill/99th-congress/senate-bill/1702
Miller, Preston J (1988) Gramm-Rudman-Hollings Hold on Budget Policy: Losing Its Grip. Retrieved from, https://www.minneapolisfed.org/research/qr/qr1312.pdf
Ribe, Frederick (June 1987) ECONOMIC IMPACTS OF THE TAX REFORM ACT OF 1986: SHORT-RUN AND LONG-RUN PERSPECTIVES. Retrieved from, https://www.cbo.gov/sites/default/files/100th-congress-1987-1988/reports/doc10a-entire.pdf
Toder Eric, Neilson Rosemarie & Sammartino Frank (August 1986) EFFECTS OF THE 1981 TAX ACT ON THE DISTRIBUTION OF INCOME AND TAXES PAID. Retrieved from, https://www.cbo.gov/sites/default/files/99th-congress-1985-1986/reports/doc20a-entire.pdf
University of California Berkley (2011) 1985 Balanced Budget and Emergency Deficit Control Act. Retrieved from, http://bancroft.berkeley.edu/ROHO/projects/debt/1985grammrudmanhollings.html