Constitution for 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 defence, 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.

wel·fare Health, happiness, and good fortune; well-being. Prosperity. pos·ter·i·ty Future generations: pos·ter·i·ty Future generations: All of a person's descendants. tran·quil·li·ty The quality or state of being tranquil; a state of peace, serenity. de·fence: a means or method of protecting the physical or functional integrity of body or mind

The Federal Government Dollar- Where it Comes From Corporate Income Taxes 9%. Social Insurance Payroll Taxes 24%. Individual Income Taxes 36%. Corporate Income Taxes 9%. Social Insurance Payroll Taxes 24%. Individual Income Taxes 36%. Taxes on Production and Imports 24% Excise Taxes 4%. Other 4%. Taxes on Production and Imports 24% Excise Taxes 4%. Other 4%.

The Federal Government Dollar— Where it Goes Footnote: Means-tested entitlements are those for which eligibility is based on income. The Medicaid program is also a means-tested entitlement.

Who pays the income taxes in the U.S.? The top 50 percent of wage earners pay 97 percent of the taxes. The top 50 percent of wage earners pay 97 percent of the taxes. 47 percent of the wage earners pay 0 percent of the taxes. 47 percent of the wage earners pay 0 percent of the taxes.

Who makes the $? Total Net Worth Top 1 percentNext 19 percentBottom 80 percent %47.5%18.7% %46.2%16.5% %46.6%16.2% %45.4%16.1% %45.3%16.6% %51.0%15.6% %50.3%15.3% %50.5%15.0%

Who is considered poor? The 2009 Poverty Guidelines for the 48 Contiguous States and the District of Columbia Persons in family The 2009 Poverty Guidelines for the 48 Contiguous States and the District of Columbia Persons in family Poverty guideline Poverty guideline 1$10,830 1$10, , , , , , , , , , , , , , ,010 For families with more than 8 persons, add $3,740 for each additional person. For families with more than 8 persons, add $3,740 for each additional person.

Income by Quintile Shares of Household Income of Quintiles Lowest quintile 3.5 Second quintile 8.7 Third quintile 14.6 Fourth quintile 23.0 Highest quintile 50.1

Wealth of richest 10% by country wealth owned by top 10% wealth owned by top 10% Switzerland 71.3% Switzerland 71.3% United States 69.8% United States 69.8% Denmark 65.0% Denmark 65.0% France 61.0% France 61.0% Sweden 58.6% Sweden 58.6% UK 56.0% UK 56.0% Canada 53.0% Canada 53.0% Norway 50.5% Norway 50.5% Germany 44.4% Germany 44.4% Finland 42.3% Finland 42.3%

The Decision of Where the Government should be involved?

Does the previous slide imply that the US should slice defence spending? China China Russia Russia North Korea North Korea Terrorists – Afghanistan Terrorists – Afghanistan Can military costs be compared across countries? Can military costs be compared across countries?

State and Local Government Where does their money come from? Where does their money come from? Federal Revenue21 percent Federal Revenue21 percent Individual income taxes 12 percent Individual income taxes 12 percent Sales Tax19 percent Sales Tax19 percent Property Tax16 percent Property Tax16 percent Corporate Income tax2.5 percent Corporate Income tax2.5 percent Other Sources Other Sources

State and Local Government How do State and Local governments spend the revenue? How do State and Local governments spend the revenue? Education29 percent Education29 percent Welfare15 percent Welfare15 percent Insurance 8 percent Insurance 8 percent Highways5.5 percent Highways5.5 percent Public Safety3 percent Public Safety3 percent

Public versus Private Crowding Out Crowding Out according to the US dept of Labor according to the US dept of Labor security guards – 1,032, percent security guards – 1,032, percent police officers – 625,880 – 38 percent police officers – 625,880 – 38 percent

Property Rights Tragedy of the Commons Tragedy of the Commons The definition, allocation, and protection of property rights comprise one of the most complex and difficult sets of issues that any society has to resolve, but one that must be resolved in some fashion. For the most part, social critics of “property” rights do not want to abolish those rights. Rather, they want to transfer them from private ownership to government ownership. Some transfers to public ownership could make an economy more effective. Others make it less effective. The worst outcome by far occurs when property rights are abolished. The definition, allocation, and protection of property rights comprise one of the most complex and difficult sets of issues that any society has to resolve, but one that must be resolved in some fashion. For the most part, social critics of “property” rights do not want to abolish those rights. Rather, they want to transfer them from private ownership to government ownership. Some transfers to public ownership could make an economy more effective. Others make it less effective. The worst outcome by far occurs when property rights are abolished.