Fiscal policy pertains to governmental activities that impact the economy, such as taxation, expenditure, and debt management. Monetary policy refers to money supply and circulation. Fiscal policy elements include taxation to generate government revenue, expenditure of funds to finance goods and services, and debt management. The public finance process involves government income from taxes, outgo of funds, and a 5-step process of formulating policy, generating revenue, budgeting expenditure, borrowing, and ensuring accountability. Progressive groups need to re-examine theories on deficits, money supply, inflation, exchange rates, and debt policies in light of changes and develop accurate discussions on monetary and exchange rate policies.

1. Fiscal and MonetaryFiscal and Monetary
Policy:Policy:
A ClarificationA Clarification

2.  Fiscal- the utilization of certainFiscal- the utilization of certain
governmental activities and actions in thegovernmental activities and actions in the
development and stabilization of thedevelopment and stabilization of the
economy.economy.
 Monetary- this pertains to the amount ofMonetary- this pertains to the amount of
money circulation or the money supply inmoney circulation or the money supply in
our country.our country.

3. Elements of Fiscal PolicyElements of Fiscal Policy
 Taxation- means of obtaining revenue/sTaxation- means of obtaining revenue/s
from government, as a means offrom government, as a means of
transferring resources from private totransferring resources from private to
public sector.public sector.
 Expenditure-means the amount of theExpenditure-means the amount of the
expenses of the government to financeexpenses of the government to finance
the goods and services they provide.the goods and services they provide.

4.  Debt management- how governmentDebt management- how government
manage the debts in the country in variousmanage the debts in the country in various
forms.forms.

5. Public FinancePublic Finance
 Income- it is the financial resources thatIncome- it is the financial resources that
the government get from taxes and otherthe government get from taxes and other
revenues.revenues.
 Outgo- is the government’s expenditure ofOutgo- is the government’s expenditure of
funds to finance the goods and services.funds to finance the goods and services.

6. Public FinancePublic Finance
5 step process5 step process
 the formulation of fiscal policy.the formulation of fiscal policy.
 The generation of revenue from taxationThe generation of revenue from taxation
and other sources.and other sources.
 The expenditure of funds through theThe expenditure of funds through the
national budget.national budget.
 Public borrowingsPublic borrowings
 accountabilityaccountability

7. Rethinking alternatives toRethinking alternatives to
Fiscal and Monetary Policy:Fiscal and Monetary Policy:
Challenges to Progressive groupsChallenges to Progressive groups

8.  First, progressive groups need to take aFirst, progressive groups need to take a
second look at dearly held theories aboutsecond look at dearly held theories about
budget deficits, money supply andbudget deficits, money supply and
inflation, foreign exchange rates andinflation, foreign exchange rates and
devaluation.devaluation.

9.  Second, alternative debts policies need toSecond, alternative debts policies need to
be continually reexamined in the light ofbe continually reexamined in the light of
rapid changes in the debt profile of therapid changes in the debt profile of the
country and global developments.country and global developments.

10.  Third, accurate discussion and debateThird, accurate discussion and debate
needed to be continued in the area ofneeded to be continued in the area of
monetary and foreign exchange policy.monetary and foreign exchange policy.