Changes in Income and Spending, Research Paper Example

Presuming that it is much easier to adjust spending upward rather than downward, does it take longer for individuals (microeconomics) or nations (macroeconomics) to adjust to changes in income and spending?

It is assumed that it is easier to spend upward than downward, and it therefore takes longer for individuals to adjust to changes in income and spending. On the macroeconomic scale regarding healthcare spending, a majority of the money that is designated to private and public hospitals is the result of money set aside especially for this purpose in the budget. Although this is a lengthy process and the budget must be proposed by the president and then approved by Congress, once the money is approved, it will be provided to all of the institutions as needed. This decision usually takes into account the amount of traffic that each healthcare institution has, its ability to use funding adequately, and the needs of the institution. Once this decision is made, the nation is forced to adjust, and this usually occurs immediately to ensure that healthcare needs are met.

When these institutions receive federal funds however, they must go through a more dramatic planning phase in order to spend downward. This is a daunting task because spending downward can require that certain aspects of care be cut and many individuals with power in the healthcare institution have opinions about what should be cut and how much, and there will always be individuals who agree and disagree with these various opinions. While a similar problem occurs in Congress when the budget is being made, it ultimately comes down to a two party vote. This is not the case in healthcare facilities because there are far more opinions than two, and this decision has more of a local impact than the decision that Congress has to make. As a consequence, it is easier for nations to make macroeconomic changes rather than for individuals to make microeconomic changes.

References

Bittle Scott, Johnson Jean. (2008). Where Does Money Go? Collins: New York.

Heniff Bill, Keith R. (2009). The Federal Budget Process. Alexandria, Va.: Capitol.Net.