ABSTRACT
Fiscal policy is defined to mean all government policy dealing with government spending and government collection of revenue, mostly taxation. The first part of this chapter briefly explains the tools of fiscal policy and gives a brief history of how fiscal policy has been used in the United States. The second part describes the furious debate over fiscal policy between conservative and progressive economists. The third part stresses the immense role of military spending in the budget and takes up the “guns versus butter”’ debate.
