The Constitution of The United States of America We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.

Unite Justice Order Protect Provide Secure Liberty

Authority Freedom Order Justice Unite Provide Securing Liberty vs Protect

Authority Freedom Justice vs Order Unite Securing Liberty Provide Protect There can be social justice, economic justice, military justice, ect. Conservatives generally believe that the government needs less power because natural laws will create balance and man will make good and fair choices- libertarism Liberals generally believe that government needs more power to help and in some cases insure that people will make good and fair choices.- paternalism

Economic Purposes of Government (according to some)

Maintaining Legal and Social Framework Examples: Create laws and provide courts provide information and services to help economy function better establish a monetary system define and enforce property rights.

Maintaining Competition Examples: Protect Competition not Competitors. Create and enforce antitrust laws regulate natural monopolies.

Providing Public Goods and Services Examples: Provide goods and services that markets are unable or unwilling to provide, such as national defense

Redistributing Income Examples: Higher income tax rates for rich than for poor provide social security aid to dependent children Medicare Medicaid.

Correcting for Externalities Example: Taxes to reduce negative externalities, such as environmental pollution subsidies to encourage positive externalities, such as education. Externalities exist when some of the costs or benefits associated with the production or consumption of a product "spill over" to third parties other than the direct producer or consumer of the product.

Correcting for Externalities Lets return to the Stag hunt game Hunter 2 Stag Hare Stag 2, 2 0, 1 Hunter 1 Hare 1, 0 1, 1 Measuring Externality- gap between the private cost and the social cost. Individuals doing things to make themselves better at the expense of other. What is the external cost of hunter 1’s decision to hunt the hare? Assuming that hunter 2 is hunting the stag regardless? Brainstorm a list of ideas that the village could come up with to offset hunter 2’s external cost.

Laws Fines and Punishment Subsidies to Stag hunters Subsidies to Rabbit hunters- not to hunt rabbit Re-distribution of wealth Tax Regulate and quotas Licenses and certifactions

Stabilizing the Economy Examples: Use government budgets and/or the money supply to promote economic growth control inflation and reduce unemployment.

Percent that you agree with the cartoon For each political cartoon Answer the questions Place yourself on the spectrum between 0 and 10 to determine how much you agree with the cartoon’s message. Explain your position. Percent that you agree with the cartoon 25 50 75 100

Economic Purposes of Government