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Fiscal policy - Coggle Diagram

- - - - Critics
        
        Debt
        
        Due to government DEFICIT SPENDING
        
        Spending more money that it's collected in tax revenue
        
        Crowling out
        
        Where increased PUBLIC SPENDING REPLACE or drive down PRIVATE SECTOR SPENDING
        
        Only a problem if economy is a full capacity
- - - - To INFLUENCE
        
        Economy
        
        Recessionary gap
        
        Output below
        
        Higher suicide rates
        Higher domestic violence
        Social upheaval
        
        Infactionary gap
        
        Output above
        
        Potencial GDP
        
        Maximum sustainable amount that economy will produce in the long run
        
        Wipe out people's savings
        Riots and potest
- - - - Economy recession (2x)
        
        Economy booming (1x)
    - - Welfare and unemployment (higher than 1.5x)
        
        Infrastructure (1.5x)
        
        Cut to pay roll and taxes (1x)
        
        Target tax cuts and tax credits (bellow 1)