American Dilemmas Models 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 MODELS Things 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. Family Legal Media Educ. Gov. 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 violence Copyright © Allyn & Bacon 2010

ECONOMIC PERSPECTIVES Fun 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 strategystrategy TX Dot stimulus moneystimulus money

Cost Effectiveness II Fixed- Effectiveness Criticisms

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

Rational/Public Choice A 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.

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” politicsspecial interest

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

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 fromfrom 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

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