Legal analysis:
During inflation, the country’s fiscal and monetary policies to suppress inflation generally include:
1. Increase bank deposit reserve ratios;
2. Increase deposit and loan interest rates;
3. Reduce currency issuance;
4. Implement a "tightening" fiscal policy (that is, have a budget surplus) ;
5. Increase the tax rate;
6. Increase the bank's "directional bills";
7. Reduce the amount of loans;
8. Reduce government fiscal bidding and procurement volume, etc.
Tightening policies are generally adopted during periods of inflation. Fiscal policies mainly include increasing taxes, reducing government purchases and investments, and reducing transfer payments. Monetary policy mainly includes increasing the rediscount rate, increasing the statutory reserve ratio, and the central bank selling government bonds. Due to various reasons, inflation is quietly coming to our country. In order to avoid abnormal development of our country's economy, we must adjust income policy, monetary policy, and foreign economic policy to improve. Inflation monetary policy and fiscal policy are based on the principle of "adverse adjustment". In theory, tight fiscal and monetary policies should be adopted. However, in fact, the economic situation is complex and changeable, and the causes of inflation are also multifaceted. Therefore, everything is based on the national announcement. For example, my country has high inflationary pressure, but my country has adopted a proactive fiscal policy and a prudent monetary policy. Inflation refers to the phenomenon of comprehensive and sustained price increases in economic operations. The issuance of banknotes exceeds the actual amount of currency in circulation, which is one of the main causes of inflation. In order to curb the rise in prices, tightening fiscal policies should be implemented at this time, such as reducing fiscal expenditures, increasing taxes, restraining aggregate demand, and reducing the inflation rate. Monetary policy is to reduce the issuance of money and increase deposit and loan interest rates.
Operation of fiscal policy:
During the period of economic expansion, tax revenue increases automatically and promptly, and transfer payments such as unemployment insurance, poverty relief, and product price support are reduced, which helps Suppress inflation;
In times of economic recession, managing deflation is the primary task of fiscal policy. The increasing deflation has seriously affected the normal development of our country's economy. The management of deflation should be regarded as the main task of macro-control and corresponding measures should be put forward.
Legal basis: "Constitution of the People's Republic of China"
Article 6 The basis of the socialist economic system of the People's Republic of China is the socialism of the means of production Public ownership means ownership by the whole people and collective ownership by the working people. Socialist public ownership eliminates the system of people exploiting people and implements the principle of distribution from each according to his ability and distribution according to his work. In the primary stage of socialism, the country adheres to the basic economic system in which public ownership is the mainstay and multiple ownership economies develop simultaneously, and it adheres to the distribution system in which distribution according to work is the mainstay and multiple distribution methods coexist.
Article 15 The state implements a socialist market economy. The state strengthens economic legislation and improves macroeconomic control. The state prohibits any organization or individual from disrupting social and economic order in accordance with the law.