Literature and theory report Essay Example | Topics and Well Written Essays - 1750 words

Literature and theory report - Essay eccentricmong economists with one school of thought arguing that the government economic consumption is a problem to the prudence charm the other thinking is that it is a solution to economic betterment. Further notes that European Union has not adopt strict approach of fiscal obligation, taxation reduction and economic freedom.2Furth is concerned with data on deficits, expenditure, taxation and growth in relation to the fiscal policy stand of thirty-seven European countries. His research revealed that morphological deficits would predict stimulus followed by reduction on deficit, and he documented a variability of fiscal policies that many economies consider pursued in paradox to a number of prevalent generalizations of European austerity.3 He notes that increasing taxes would be far more than harmful than expenditure cuts,4 and the effect of tax increment mother a huge difference, and they cannot be together labelled as austerity as th ey would conceal more than at that place is in the revelation of fiscal policy.5Furth research has shown the relationship that exists between increased government expenditure and economic progress. Other economists had focused on government debt and its effect to the economy. It had been noted that government debt hurt the economy by burdening not only the current generation but also the future generation.6 Due to high up debt the current generation is forced to pay for the interest of the loan advanced to the country for which benefit bequeath be consumed by future generation. Moreover, the future generation will carry on the burden and steal of their predecessors because the rate of interest will be much higher that the benefit of which it was taken. Furths research presents some other angle to fiscal policy approach that the government can utilize without resulting to changing the taxation system. It reveals that there has been a considerate role of the government inability to set up good fiscal policies. Governments have concerned themselves in increasing taxes in