American Dilemmas Models and Economic Approaches

American DilemmasModels and Economic

Approaches

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.

Paper Proposal

• Due in class on 7/8

• 5% of your final Grade

• Involves submitting 2 Parts– Worksheet– 2 page paper

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

SOCIOLOGICAL MODELSThings Decision Makers do not use

Sociological Theories

• Sociological theories– Functionalism– Conflict Theory– Symbolic Interactionism

Functionalist Perspective

• Society is a system that is made up of a number of interrelated elements, each performing a function that contributes to the operation of the whole.

FamilyFamily

LegalLegal

MediaMedia

Educ.Educ.

Gov.Gov.

Econ.Econ.

Social Institutions

Conflict Perspective

• Society consists of different groups who struggle with one another to attain the scarce societal resources that are considered valuable, be they money, power, prestige, or the authority to impose one’s values on society.

Symbolic Interactionism

• Interactionism focuses on everyday social interaction among individuals rather than on large scale societal structures.

Sociological Explanations of Violence

• Functionalist:– Violence increases when social institutions are

weakened– Solution: Strengthen social institutions (family, schools)

• Conflict:– Violence is a response to inequalities in society– Solution: Reform political and economic institutions to

change inequality.

• Symbolic Interactionist:– Violence is learned behavior– Solution: change societal values which encourage

violenceCopyright © Allyn & Bacon 2010

ECONOMIC PERSPECTIVESFun From the Dismal Science

Rationalism

• Cost- benefit• Cost Effectiveness• Risk assessment

Cost Benefit Analysis• What is it?

• How Do you Conduct it?

• • • How do you put a value on Human life? •

•

• •

Cost-Benefit II

• Advantages

• Criticisms of C-B

Cost Effectiveness

• How it Works

• Fixed-Budget Analysis • Slot Machine strategy • TX Dot stimulus money

Cost Effectiveness II

• Fixed- Effectiveness

• Criticisms

Risk Assessment

• What is it?

• How does it Work?• What are its' criticisms?

– Type I error – Lowering Risk is Expensive

• Spillover Costs • Spillover costs II

Rational/Public ChoiceA Cross-over Model

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

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.

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?

Political Feasibility

• What is it

• How Does it work

Economics

The Dismal Science

Economics

• Fiscal Policy

• Monetary Policy

The Economy as a series of sectors

• Primary

• Secondary

• Tertiary

The Modern U.S. Economy

• A Shift Away from the First Two Sectors• A Service Based Economy

– Affluent service jobs– Welfare service– Service Jobs

The Economy as a series of “Collar” Jobs

• White Collar• Blue Collar• Pink Collar• Green Collar

Collar does not always equate with income

Theories of Economics

• Classical Theory

• Keynes

• Supply-side

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

States and municipalities are also Big Players

• They can also tax

• They can provide incentives for economic growth

• Provide services for its residents

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

Historical GDP Change

Low Unemployment: Goal 2

• What is Unemployment

• Who does this Exclude?

• What it does not measure

The Positive aspects of Low Unemployment

• More Tax Revenue

• Fewer people receiving benefits

• Lower Crime

Unemployment in U.S.

• www.bls.gov

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

The Role of Unions

• Once 25% of workers, now ½ of that.

• Reasons for the Decline

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” politics

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 time

Goal 4: A positive Balance of Trade

• A Nation Wants to Export more than it Imports

• The United States is the reverse

Why We have a deficit

• Where it comes from

• What are the reasons

The Advantages and Disadvantages of a Trade Deficit

• Disadvantages

• Advantages

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

Where to set the Tax Rate• http://www.youtube.com/watch?v=ZmxpftPFXZg&feature=related

Types of Taxes

• Regressive

• Progressive

• Sin Taxes

Our Tax Burden Is Lower than Most Nations

The National Debt: The problem of our Tax Policy

• We accumulate annual budget Deficits

• We have to Pay interest on this

• We owe roughly 10 Trillion Dollars

The Debt

• Disadvantages

• Advantages

What to about it

• Raise Taxes

• Cut Spending

• Some Combination of both

Raising Taxes

• A Political Albatross

• We like Tax Cuts instead

• We Like sin taxes- but we are running out of these

Raising Taxes on Who?

• Soak The Rich

• Make the Poor Chip in

• Close Loopholes

Change How We Tax

• Add a consumption or VAT Tax

• Add a Flat Tax

• Try A “Fair Tax”

Cut Spending

• There is No Political Gain to do so

• Cut Back on Entitlements

• Reduce Discretionary Spending

Pay the Light Bill