Hillary Clinton Should Use Keynesian Economics for Her Fiscal Policy

As an economic advisor to Democratic frontrunner Hillary Clinton, I would advise her to follow Keynesian economics in her fiscal policy, with an emphasis on federally subsidized child care and pre-kindergarten for low-income families, a federally mandated fifteen dollars an hour minimum wage that would include a tax break for small businesses provided that the business is worth under seven hundred and fifty thousand dollars, and a tax break on small businesses that would include up to two years tax-free provided that the business’s net worth is under seven hundred and fifty thousand dollars.

The increased taxes would be subsidized by an increased tax on capital gains and a raise on the top rate of the estate tax. With this fiscal policy, unemployment and poverty rates would drastically decrease while the middle class would drastically increase. The United States would see an increase in revenue from taxes because of the growth of the middle class.

At the moment, childcare is one of the greatest threats facing the United States economy. A lack of affordable childcare traps single mothers and families that cannot afford for both parents not to work in poverty, unable to get a job because of needing to stay home with a child or children. Federally funded childcare and pre-kindergarten for middle-class families and families below the poverty line would provide a huge boost to the American economy because of both the jobs in childcare that would be created and the increased income for lower and middle-class families. Furthermore, as more people can move out of poverty and into jobs because of the availability of free childcare, the government will save money on entitlement payments and start collecting taxes from those who used to be in poverty. Coupled with a fifteen dollar an hour minimum wage, universal childcare would greatly reduce the poverty rates in America.

I would encourage Mrs. Clinton to focus heavily on increasing small business in America while still focusing on raising wages for America’s lower and middle classes. The only argument available from Republicans as to why a fifteen-dollar minimum wage will not work is because it would hurt small businesses. This is why I would advise Mrs. Clinton to increase the minimum wage to fifteen dollars an hour and implement a tax cut for businesses whose net worth is under seven hundred and fifty thousand. For the first two years after the increase in the minimum wage, the government will issue a tax cut to small businesses that splits the increase in the minimum wage with them. That would mean that the new minimum wage for small businesses is only a four dollar an hour increase, rather than an eight dollar an hour increase. This would ease the burden on small businesses while still providing a respectable and living wage for the employees. As of now, many people who work minimum wage jobs are on some type of government assistance. An increased minimum wage would take many people off of government assistance, so this subsidy would not be a huge increase in spending for the United States government.

To encourage small businesses and stimulate local economies, I would encourage Mrs. Clinton to offer up to two years tax-free to small businesses with a total net worth under seven hundred and fifty thousand dollars. This would encourage more people to start small businesses, which would put more money into local economies. Strong, healthy small businesses should be the foundation of the American economy. Two years without taxes would propel small businesses so far ahead that it would provide stability and financial support for communities for many years to come. Furthermore, while using both the two years tax-free and the federal assistance for minimum wage, small businesses will add many jobs to local economies.

All three of these programs would be funded by an increase in capital gains tax and a higher estate tax rate on the top estates. This would leave the middle class largely unaffected while providing enough money to strengthen the middle class. A large part of these tax cuts and incentives would be paid for by money saved by not having to pay as many entitlements as more people move out of poverty and into the middle class. 

As an economic advisor to Hillary Clinton, I would advise her to base her fiscal policy on Keynesian economics by putting more money into the lower and middle classes to stimulate the economy. I would advise federally subsidized childcare and pre-kindergarten, a fifteen dollar an hour minimum wage, partially funded by the United States government for small businesses to local economies, and a two year two-year period for small businesses in America.

Cite this page

Hillary Clinton Should Use Keynesian Economics for Her Fiscal Policy. (2022, Jun 15). Retrieved from https://paperap.com/hillary-clinton-should-use-keynesian-economics-for-her-fiscal-policy/

Let’s chat?  We're online 24/7