3. ‘MURICA!

4. Bell Ringer Land of Opportunity What does it mean to you when America is described as the “Land of Opportunity”?

5. Objectives 1. Define the basic principles of the U.S. free enterprise system. 2. Identify the constitutional protections that underlie free enterprise. 3. Explain why the government may intervene in the marketplace.

6. Intro: What is Free Enterprise? The United States considers itself to be a “land of opportunity.” The American tradition of free enterprise has been a key factor in supporting this belief.

8. Principles of Free Enterprise Profit motive (aka, Self Interest) In a free enterprise, businesspeople make decisions based on what will increase their profits Open opportunity (aka, Competition) The American principle of open opportunity says that anyone can compete in the marketplace.

9. Principles, cont. Legal equality American free enterprise believes in the principle that everyone has the same legal rights. Private property The free enterprise system allows people to make their own decisions about their own property. Freedom to buy and sell People can decide what agreements to enter into, as well as what, when, and how they want to buy and sell.

10. Advantages/Benefits What are the benefits of free enterprise? Free enterprise makes it possible for people who have ideas and persistence to start businesses and make themselves successful. Hard work + Opportunity = $$$ Free enterprise also offers a great deal of economic freedom to the consumer.

11. Disadvantages/Costs What are the costs of free enterprise? Although free enterprise rewards hard work, it doesn’t provide everyone with an equal opportunity. Free enterprise tends to reward those who already have wealth It sacrifices security for freedom

12. Vote With Your Feet FreedomEquality Which is more important: Freedom or Equality? We should all have the same start We should all cross the finish line together “We should all have the same start” or “We should all cross the finish line together”? Some people are born lucky People make their own luck “Some people are born lucky” or “People make their own luck”?

13. Vote With Your Feet People are poor because they are lazy. Agree/Disagree: People are poor because they are lazy. The government should do more to help out the poorThe government should stay out of people’s lives “The government should do more to help out the poor” or “The government should stay out of people’s lives”?

14. Debate Pro-free enterprise: http://www.youtube.com/watch?v=7NfLUCBZ1is “Don’t Eat Your Dog” Pro-equal opportunity: http://www.youtube.com/watch?v=u2ilK4fe2jo “Republicans Want Wealth Redistribution” http://www.youtube.com/watch?v=DsrY0u5Z2fA “Equal Opportunity is America”

15. Closure Think back to the arguments presented in the videos. Determine on your own whether you are pro-free enterprise or pro-equal opportunity. Write a 3-5 sentence defense of your position.

16. Bell Ringer Imagine the country divided into five groups based on income: the bottom 20%, the second 20%, the middle 20%, the fourth 20%, and the top 20% Make two copies of following bar graph into your notes…

17. Bottom 20% Fourth 20% Middle 20% Second 20% Top 20% INCOME 100% 0% IDEAL vs. REAL

18. Bell Ringer http://www.youtube.com/watch?v=QPKKQn ijnsM http://www.youtube.com/watch?v=QPKKQn ijnsM “Wealth Inequality in America” How did your graphs compare with those shown in the video?

19. The Constitution Free enterprise in the United States is written into the framework of the U.S. Constitution.

20. The Constitution, cont. The Constitution also spells out how government can tax individuals and businesses. According to Article 1, Congress has the power to levy taxes. In addition, the Constitution guarantees people and businesses the right to make contracts.

21. Eminent Domain One right granted by the Constitution is the 5th Amendment, which protects private property from being taken from a citizen without due process. However, the government has the right to take private property for public use (as long as it pays fair market value). This is known as eminent domain.

22. The Role of Gov’t tin the The role of the government in the marketplace includes: Carrying out the constitutional responsibilities to protect property rights, contracts, and other business activities Making sure that producers provide consumers with information Protecting the health, safety, and well-being of consumers. “Food Defect Action Levels”

23. Major Federal Regulatory Agencies

24. Negative Effects of Regulation Possible negative effects of government regulation include: Rules are costly for businesses to implement Regulations can limit competition Increases government spending

26. Regulation Cost/Benefit Analysis Select a U.S. federal regulatory agency. Chart is on pg. 54 Create a simple t-chart. Label one side “Cost” and the other “Benefit”. List at least five costs and five benefits that your chosen agency has to business and to the general public. Answer the following question in 3-5 sentences : “Based on your cost/benefit analysis, is it worth it to the U.S. to keep your chosen federal regulatory agency in service? Why/why not?”

27. Assignment: Defining Blight 1. Read the Wall Street Journal article on eminent domain. 2. Study the political cartoon on the reverse side. 3. Using the political cartoon, complete the Political Cartoon Analysis Guide

28. Bell Ringer What does the government actively do to keep the economy moving forward? Examples??

29. Objectives 1. Explain why the government tracks and seeks to influence economic progress. 2. Analyze the concept of “creative destruction.”

30. Introduction How does the U.S. government encourage growth and stability? The U.S. government encourages growth and stability by: Tracking economic progress Promoting a high employment rate Encouraging the development of new technologies

31. Tracking Economic Progress One measure of the nation’s economic well-being is gross domestic product (GDP). GDP = the total value of all final goods and services produced in a country in a given year Current U.S. GDP = $16.8 trillion

32. How much did the GDP grow between 1910 and 2010? About $8 trillion

33. Employment The government strives to make sure there are enough jobs for everyone who is able to work. An unemployment rate between 4 percent and 6 percent is considered healthy. What is it today? 5.5 percent as of May 2015 4.4 percent in May ‘07; 10.0 percent in Oct. ‘09

34. Technological Progress Technological progress has enabled the U.S. economy to operate more efficiently. Many inventions have improved productivity in the United States, including: The light bulb, which made a longer workday possible The assembly line, which led to mass production at affordable costs List at least three more technological innovations that improve productivity.

35. The Government’s Role The government promotes innovation and invention to help maintain the country’s technological advantage by: Funding research and development projects at universities Establishing their own research institutions, like NASA Granting patents and copyrights, which are an incentive to innovation

36. Key Terms gross domestic product (GDP): the total value of all final goods and services produced in a country in a given year patent: a government license that gives the inventor of a new product the exclusive right to produce and sell it copyright: a government license that grants an author exclusive rights to publish and sell creative works

37. “Paradox of Progress” List three advantages and three disadvantages of technological progress. Pick one innovative product/service. Draw a timeline of the products/services that led up to your chosen item. Last, imagine some possible steps in the item’s future development.

38. Bell Ringer What is “poverty”? Google  “the state of being extremely poor” US Dept of Health and Human Services: “The set minimum amount of gross income that a family needs for food, clothing, transportation, shelter and other necessities.” In 2011, the gross yearly FPL was $22,350 for a family of four.

39. Objectives 1. Describe how the government provides public goods to all citizens. 2. Explain the U.S. political debate on ways to fight poverty. 3. Identify the main programs through which the government redistributes income.

40. Public Goods In the case of most public goods it is simply not practical for a private business (the private sector) to provide the service, charge those who benefit, and exclude non-payers from using the source. Public goods are financed by the public sector.

41. Public Goods EXAMPLES?

42. The Poverty Problem In a free market, the wealth is spread unevenly throughout society, which leaves some people below the poverty threshold (the “Haves” and “Have-Nots”). The U.S. Bureau of the Census sets the poverty threshold based on the cost of the goods a family needs to buy.

43. The Poverty Problem Some experts think the threshold is set far too low (currently, $22,350 for a family of four ). “Poverty in America isn’t a choice” - http://www.youtube.com/watch?v=qNpLm0Lk0UA http://www.youtube.com/watch?v=qNpLm0Lk0UA “Half of America in Poverty”

44. The gov’t and the poor How does government help the poor? Government programs take money from some people and redistribute it to others. Such programs include: The welfare system Cash transfers In-kind benefits Medical and educational benefits

45. The Government’s Role The government provides a safety net to groups like the very young, the very old, the sick, the poor, and the disabled through various federal, state, and local government programs.

46. Redistribution Programs Cash transfer programs Temporary Assistance for Needy Families (TANF) - sends welfare payments directly to the states, which design and run their own welfare programs Social Security - collects money from current workers and redistributes funds to retired and disabled persons

47. Redistribution Programs Cash transfer programs Unemployment Insurance - Provides money to workers who have lost their jobs as long as recipients offer proof that they have made efforts to get work. Worker’s Compensation - Provides state funds to workers injured on the job.

48. In-Kind Benefits In-kind benefits Food stamps - Qualified people receive assistance with their monthly food purchases Subsidized housing - Qualified people are allowed to rent housing for less than the regular rent (Section 8) Legal aid - Qualified people receive legal advice at no charge

49. Medical and Educational Benefits The government provides health care to the elderly (Medicare), the disabled, the poor (Medicaid), and children who are uninsured. The government also funds educational programs from preschool to college. College grants & Stanford loans

50. Key Terms welfare: government aid to the poor cash transfers: direct payment of money by the government to the poor, disabled, or retired people in-kind benefits: goods and services provided for free or greatly reduced prices