Effects of Government Policies Costs and Benefits

Minimum Wage Laws Benefits (+) Protects uneducated workers Protects young workers Redistributes wealth of business Costs (-) Creates big government –Government is involved in the daily lives of its citizens Capitalism was built on the idea that government would not be involved in the business world

Anti-trust Laws Costs (-) Creates big government –Government is involved in the daily lives of its citizens Too many regulations cost businesses a lot of money –$1 trillion annually Capitalism was built on the idea that government would not be involved in the business world Benefits (+) Break up monopolies Allows for more competition Holds business owners responsible for wrong- doings Promotes fair business practices –If not, taken to court Helps unions Think: Clayton Antitrust Act, Sherman Act, Muckraking, The Jungle

EPA Regulations Costs (-) Creates big government –Government is involved in the daily lives of its citizens Government deficits cost future tax payers Cost passed on to consumer Benefits (+) Protects consumers Protects environment Set rules and regulations for businesses Can fine businesses Encourages eco- friendly alternatives

Social Security Costs (-) Creates big government –Government is involved in the daily lives of its citizens Government deficits cost future tax payers Will it be there when you need it???? Benefits (+) Provides monthly income to retired workers, spouses, disabled, and orphans Money collected from both workers and businesses through a tax

Farm Subsidies Costs (-) Creates big government –Government is involved in the daily lives of its citizens Government deficits cost future tax payers AAA during Great Depression –Farmers killed livestock to get subsidy money Benefits (+) Protects environment through conservation –CRP ground Provides money to farmers during bad crop years Encourages farmers to limit supply of crops so prices are good

International Sanctions on Agriculture Costs (-) Hurts trade relations Prices of goods change –Importing country: Shortage of crop, price increases –Exporting country: surplus crop, price drops Benefits (+) Increases safety of food for consumers –Importing country Encourages better farming practices –Exporting country

Medicare Costs (-) Creates big government –Government is involved in the daily lives of its citizens Government deficits cost future tax payers Will it be there when you need it???? How good is the medical coverage??? Benefits (+) Provides medical and hospital care for people 65 and older Money collected by worker and business through a tax

Unemployment Insurance Costs (-) Creates big government –Government is involved in the daily lives of its citizens Government deficits cost future tax payers Benefits (+) Provides monetary relief while the person is without a job Provides help in finding them another job Think: Great Depression time period

Corporate Tax Credits Costs (-) Some businesses pay taxes twice (called double taxation) –On their earnings –On shareholder dividends –On personal wages Benefits (+) Provides money to government –Businesses are taxed Think: big business, robber barons, progressives

Public Works Projects Costs (-) Big government –Government is involved in the daily life of its citizens Government deficits cost future tax payers Benefits (+) Puts unemployed people back to work Beautifies cities Improves roads, buildings, hospitals, schools Think: Great Depression time period; New Deal Projects

U.S. Government Receipts and Expenditures /U_S_Federal_Receipts_and_Outlays.htmlhttp://encarta.msn.com/media_ /U_S_Federal_Receipts_and_Outlays.html What conclusions can you draw about the U.S. treasury?