I believe that there is a good reason why there need to be a fiscal policy in our government. A government's fiscal policy is established to help increase or decrease spending and taxes to control the economy. When the taxes are higher than spending then there could be surplus or if the spending is more than the taxes then there is a deficit.

From what I understand, expansionary and contractionary are two main types of fiscal policy.Expansionary fiscal policy has been known to stimulate the economy. This occur mostly during a recession, high unemployment, or other low periods of the business cycle. It requires the government to spend more money, lowering taxes or together at the same time.The goal is to put more money in the hands of consumers, so they can go out and spend that money into the economy. Like most of us experience lately, the government pay the citizens a certain amount of money that benefit us little bit. My concern on this one is how long can it lasts and is it really working?

On the other hand, contractionary fiscal policy is used to slow economic growth. For example, when there is an inflation this policy is suppose help calm the growth down a little bit.In this case, the taxes will be raised, and spending is lowered.

What is you opinion to this?