If you watch enough of the evening news you will hear two terms used over and over again, fiscal and monetary policy . Both are attempts by different organizations to keep the economy on a stable course. Most people enjoy a healthy economy because it has a way of regulating many social aspects of daily life. There is far less crime, abuse, unemployment, divorce, school-dropout, etc. during good economic times. Fiscal policy is a term used regularly by politicians and media alike, but few use it accurately.
Fiscal policy is simply an attempt by the federal government to regulate or stabilize the economy.
So, each year as the federal government debates and proposes the next fiscal budget, Congress must keep in mind its goal of stabilization as it plans ahead. There are two major phases of the business cycle that you must concern yourself with. The first is the expansion phase and the second, the contraction phase. Most people associate good times with the expansion and bad times with the contraction. It really depends on your particular situation.