Fiscal policy is limited by the availability of resources, the political environment, and the economic environment. Resources are limited by the amount of money available to the government, which is determined by the amount of taxes collected and the amount of borrowing the government can do. The political environment can limit fiscal policy if there is disagreement between political parties or if the government is unable to pass legislation due to a lack of support. The economic environment can limit fiscal policy if the economy is in a recession or if inflation is too high.
