3.  Property Rights  5 th Amendment  Eminent Domain  “blighted”  Taxation  Two certainties in life: “Death & Taxes”  Congress has the power to levy taxes  16 th Amendment allows income tax  Guarantees right to make binding contracts

4.  Basic Principles of Free Enterprise  Profit Motive  Self-incentive  Your idea, your profit  You decide vocation, not government  Open Opportunity  Anyone can start a business

5.  Economic Rights  Legal Equality  Private Property Rights  Land!  Free contract  Voluntary exchange  All of these things leads to:  competition

6.  Consumer Sovereignty  Buy what you need  Shop for what you want  Consumption signals producers

7.  Government is expected to uphold its constitutional responsibilities  Information and Free Enterprise  Informed buyers are efficient  Product information  recalls  Protecting Health, Safety & Well-being  Negative Effects of Regulation  Government involvement ALWAYS increases cost

9.  Macroeconomics  The study of large economic systems  Microeconomics  The study of small economic systems  Gross Domestic Product (GDP)  The value of ALL goods & services produced in an economy  Measured quarterly & totaled yearly

11.  Government economic policy  Stabilize Employment  Ensure growth  Economic Stability  Provides confidence in institutions like banks  Assurances of solvency  Stable price level (inflation)

13.  Work smarter not harder (work ethic)  Technology  Allows us to produce more

15.  A shared good or service that is impractical for the individual to provide  Parks  Water delivery  Roads  Dams  Military  Others?

16.  Costs & Benefits  Shared costs  Shared benefits  Free-Rider Problem  Benefits without the cost

17.  Simply represents the fact that commerce is carried out to the benefit of producers  No allowance is made for benefit outside of commerce  Businesses would build roads to benefit their customers, not the customers of another business

20.  The free market generates wealth unevenly  Some live at or below the poverty threshold  2012: 1 person under age 65 $ 11,170  2012: 4 person family $ 23,050  2012: median household income $50,054

21.  The role of the government:  To provide for those unable to care for themselves  elderly, handicapped  This reflects societies values

22.  The Modern Welfare System  Started in the 1930’s  Taxes individuals & redistributes wealth  Poverty Rate 1970-2010 14%

23.  Lyndon B. Johnson’s “War on Poverty”  Estimated cost $15,000,000,000,000 with little long term improvement

24.  Redistribution Programs  TANF  Social Security  Unemployment Insurance  Workers’ Compensation  Food Stamps  Medical Benefits  Education Funding (Title I, Head Start)