The Federal Reserve is an independent federal agency that was created on December 23rd, 1913; the purpose of this agency was to carry out the functions of a central bank to implement centralized control over banking system of the United States (“The Federal Reserve: What Is The Fed? | Investopedia”). The Federal Reserve consists of 12 Federal Reserve Banks located in major cities, nearly 3 000 commercial member banks appointed by the President of the Board of Governors, Federal Committee on Open Market and advisory councils (“The Structure and Functions of the Federal Reserve System”). The basis for its creation was the Law on the Federal Reserve. The major role in the management of the Federal Reserve is played by the state, although the form of equity ownership is private − JSC with a special status of shares. The Federal Reserve is independent from the US government; is has the authority from the US Congress. The independence of its work is ensured by the following: decisions on monetary policy do not need approval of the US President or by the executive or legislative branches of government; the Federal Reserve does not receive funding from Congress (“The Structure and Functions of the Federal Reserve System”). At the same time, the Federal Reserve is controlled by the Congress, which often analyzes its activity and can change its responsibilities by legislation.
The Free Market is a market free from any outside interference, including government regulation in the form of taxes, subsidies etc. (“Free Market Definition | Investopedia”). The function of the state in the Free Market is reduced to protection of the rights of property and the maintenance of contractual obligations. Also, the Free Market means the market where prices are set freely, without outside interference, and other external factors, solely on the basis of supply and demand (“Free Market Definition | Investopedia”). The basis of the free market is the right of any manufacturer to create any product or service and to offer it to consumers and the consumer’s right to purchase any product or service offered from any manufacturer. The price is then determined as a result of an agreement between the seller and the buyer (“Free Market Definition | Investopedia”).
The US national debt is the debt the US federal government to its creditors. It does not include the debts of the individual states, corporations or individuals, even those guaranteed by the state, as well as future obligations to the beneficiaries of social aid (“U.S. GAO - Fiscal Outlook: Understanding the Federal Debt”). Currently, the national debt of the United States is more than 19.2 trillion US Dollars (“U.S. National Debt Clock: Real Time”). From the end of the 1960s, the expenditures of the US annual budget exceed the revenues, and this leads to the budget deficit which in its turn results in the increase of the national debt. The ratio of US debt to GDP peaked in 1946, which was the result of massive military expenditure during the Second World War. After that, the situation improved due to outperformance of economic growth over the growth of the national debt. Since the 1980s, however, the volume of public debt began to grow much faster than the economy (“U.S. GAO - Fiscal Outlook: Understanding the Federal Debt”). The gap between the dynamics of GDP growth and the growth of the national debt has increased in the 2000s.
If I could decide the tax structure, I would choose the flat one because it seems the fairest one among the other types of tax structures; it will reduce the risk that companies and individuals with high level of income will have an incentive to find the ways to hide part of their revenues or to register their companies in the offshore countries in order to reduce tax pressure. The individuals that do not pay into the tax structure should be entitled to benefit from taxes, but with regard to the individuals in the working age − the amount they can receive should be limited to a certain sum per year. The reason for this is that citizens must be supported during the periods of life when they are experiencing some difficulties, but at the same time those people who are able to work and earn their living should be given an incentive to do so instead of waiting for some social aid from the state. The amount one should be entitled to keep from every dollar one earns should be no less than 70%.
Ten things local governments spend taxpayers’ money on: education, public welfare, health care, highways, police, fire protection, interest on debt, utilities, county councils and district councils (“Financing State and Local Government [Ushistory.Org]”). Ten things state governments spend taxpayers’ money on: K-12 education, higher education, Medicaid, children’s health insurance program, transportation, public assistance for the poor, corrections, contributions to public employees’ pensions, health benefits for public employees, and aid to local governments (“Policy Basics: Where Do Our State Tax Dollars Go? | Center on Budget and Policy Priorities”). Ten things federal government spends taxpayers’ money on: social security, unemployment and labor, Medicare and health, food and agriculture, veterans’ benefits, transportation, military, education, housing and community, international affairs, science, energy and environment (“Federal Spending: Where Does The Money Go”).
Budget. At an entry level my annual gross salary will be approximately 40 000.00 US Dollars. Thus, my monthly gross pay will be about 3 333 USD, federal withholding will be 434 UDS, for social security I will have to pay 206 USD and for Medicare – 48 USD; the state tax will be about 102 USD, and after paying all these taxes and withholdings I will have about 2 511 USD of net salary per month. Out of that amount, let’s assume that I will pay 400 USD on mortgage, 350 USD for food, about 125 USD for pg and e, car insurance will take about 20 USD per month, gas, phone, cable and internet will cost me about 90 USD each month; vision and dental services will cost around 70 USD if divided per month, for household items I will try to spend no more than 600 USD per month and I will try to limit my expenses on clothing and personal items by 500 USD per month. Thus, if I stick to my budget, I will have about 350 USD left each month, I can save this money for my summer vacation or to buy some expensive items like a new oven or a new TV set, etc.
Works Cited:
“Financing State and Local Government [Ushistory.Org]”. Ushistory.org. N.p., 2016. Web. 2 Apr. 2016.
“Free Market Definition | Investopedia”. Investopedia. N.p., 2005. Web. 2 Apr. 2016.
“Policy Basics: Where Do Our State Tax Dollars Go? | Center On Budget And Policy Priorities”. Cbpp.org. N.p., 2016. Web. 2 Apr. 2016.
“Federal Spending: Where Does The Money Go”. National Priorities Project. N.p., 2016. Web. 2 Apr. 2016.
“The Federal Reserve: What Is The Fed? | Investopedia”. Investopedia. N.p., 2003. Web. 2 Apr. 2016.
“The Structure and Functions of the Federal Reserve System”. Federalreserveeducation.org. N.p., 2016. Web. 2 Apr. 2016.
“U.S. GAO - Fiscal Outlook: Understanding the Federal Debt”. Gao.gov. N.p., 2016. Web. 2 Apr. 2016.
“U.S. National Debt Clock: Real Time”. Usdebtclock.org. N.p., 2016. Web. 2 Apr. 2016.
