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American Dilemmas Models and Economic Approaches.

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Presentation on theme: "American Dilemmas Models and Economic Approaches."— Presentation transcript:

1 American Dilemmas Models and Economic Approaches

2 Learning Objectives Critically analyze social problems by identifying value perspectives and applying concepts of sociology, political science, and economics; Use knowledge and analyses of social problems to evaluate public policy, and to suggest policy alternatives, with special reference to questions of social justice, the common good, and public and individual responsibility.

3 TOPICS Good and Bad

4 Paper Proposal Due in class on 7/12 5% of your final Grade Involves submitting 2 Parts – Worksheet – 2 page paper

5 A Good Topic addresses a social Problem and has a controversial solution

6 A Good Topic is one that is being discussed by real people Theoretical discussions on policy are no better than Drunk Talk! For Example –

7 Where to find good topics Google News Newspapers The White House Page Congress- The Library

8 Good or Bad? What are the effects of Embryonic stem cell research? Should the US lift the trade embargo on Cuba? Should the use of cell phones be prohibiting while driving? Why is the war in Afghanistan wrong?

9 Good or Bad Is global warming detrimental to human existence? Should the Federal Government pass a cap-and-trade bill to combat global warming Has the federal government diminished the rights of citizens since 9/11?

10 Good or Bad Should the burning of the flag be made unconstitutional Should Botswana charge fees for state education?

11 Good Macro Topic Areas State and Federal Income programs (Medicare, Medicaid, Food Stamps) Economic Policies Immigration Energy and the Environment Foreign Policy with troublesome nations Social Security Budgets and deficits Education Campaign finance/electoral reform Transportation (federal, state and local) Health Care Repeal/Reform

12 ECONOMIC MODELS

13 What are Perspectives/Models Methods that each discipline uses to understand social problems Simplified representations of some aspect of the real world – Simplify and clarify difficult problems – Help understand what is important and unimportant

14 Rationalism Cost- benefit Cost Effectiveness Risk assessment

15 Cost Benefit Analysis What is it? How Do you Conduct it? How do you put a value on Human life?Human life

16 Cost-Benefit II Advantages Criticisms of C-B

17 Cost Effectiveness How it Works Fixed-Budget Analysis Slot Machine strategystrategy

18 Cost Effectiveness II Fixed- Effectiveness Criticisms

19 Risk Assessment What is it? How does it Work? What are its' criticisms? – Type I errorerror – Lowering Risk is Expensive Expensive Spillover costs II

20 Rational/Public Choice A Cross-over Model

21 Rational/Public Choice The application of economic analyses to public policymaking In economics, people pursue their self- interests in the market. In policy you try to maximize your personal benefits

22 Public Choice Actors Can be applied to any unit of analysis (state, person, interest group, etc) People will join collective organizations when it benefits them.

23 Incrementalism Select policies based on the existing order. Policy is a continuation of past government activities with only incremental modifications A policy conservative and expedient way of making change. Downsides?

24 Political Feasibility What is it How Does it work

25 Economics The Dismal Science

26 Economics Fiscal Policy Monetary Policy

27 The Economy as a series of sectors

28 The Modern U.S. Economy A Shift Away from the First Two Sectors A Service Based Economy – Affluent service jobs – Welfare service – Service Jobs

29 The Economy as a series of “Collar” Jobs White Collar Blue Collar Pink Collar Green Collar Collar does not always equate with income

30 ECONOMIC POLICY MAKERS Who Does it

31 Key actors in Economic Policy We do not have a single economic policy The federal government is the key player here, why? – The Power to Tax – Regulate foreign trade – Coin Money and set its value

32 States and municipalities are also Big Players They can also tax They can provide incentives for economic growth Provide services for its residents

33 Economic Growth: Goal #1 An Increase in the GDP each year More Money means more tax revenue “Crazy” Growth, however, is not a good thing

34 Historical GDP Change

35 Low Unemployment: Goal 2 What is Unemployment Who does this Exclude? What it does not measure

36 The Positive aspects of Low Unemployment More Tax Revenue Fewer people receiving benefits Lower Crime

37 Unemployment in U.S.

38 Our Unemployment compared to other Nations Historically, it has been much lower Even in our poor economy, it is about the same as the EU region

39

40 The Decline of Labor Unions

41 The Economic and Political Effect of Unions Union Workers earn 10% to 15% than non- union workers in similar occupations A large player in “special interest” politicsspecial interest

42 Economic Goal 3: Low Inflation The Government wants low levels of inflation, why? Measured by the Consumer Price Index (CPI) How it has changed over timechanged

43 Goal 4: A positive Balance of Trade A Nation Wants to Export more than it Imports The United States is the reverse

44 Our Trade Deficit

45

46 Why We have a Trade deficit Where it comes fromfrom What are the reasons

47 The Advantages and Disadvantages of a Trade Deficit Disadvantages Advantages

48 Goal 5: Sound Tax Policy A sound tax policy should collect as much at it spends A sound policy does not disrupt the functioning of the economy

49 Where to set the Tax Rate

50 Types of Taxes Regressive Progressive Sin Taxes

51 Our Tax Burden Is Lower than Most Nations

52 Who Pays Income Tax?

53 The National Debt: The problem of our Tax Policy We accumulate annual budget Deficits We have to Pay interest on this We owe roughly 13 Trillion Dollars

54 Comparative Debt

55 The Debt Disadvantages Advantages

56 What to about it Raise Taxes Cut Spending Some Combination of both

57 Raising Taxes A Political Albatross We like Tax Cuts instead We Like sin taxes- but we are running out of these

58 Raising Taxes on Who? Soak The Rich Make the Poor Chip in Close Loopholes

59 Change How We Tax Add a consumption or VAT Tax Add a Flat Tax Try A “Fair Tax”

60 Cut Spending There is No Political Gain to do so Cut Back on Entitlements Reduce Discretionary Spending

61 Pay the Light Bill


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