How has the United States' fiscal policy changed over the last century?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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This is a pretty broad question.  I would say that there are two important ways to answer it.

First, fiscal policy is much more Keynesian today than it was in 1910.  This change started with the New Deal and has continued on, more or less unchanged, to the present.  Nowadays, the federal government tends to believe in using spending and/or tax cuts to try to stimulate the economy (as happened late in the Bush and early in the Obama administrations).

Second, I would say that there is simply more fiscal policy now.  In other words, the government does much more taxing and spending than it did in 1910.  It involves itself much more in the economy than it did in those days.  This, too, started with the New Deal and continued.

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