Economics Debate Guide
From PhiloWiki
- Economics (from the Greek οίκος [oikos], 'family, household, estate', and νομος [nomos], 'custom, law', hence "household management" and "management of the state") is a social science that studies the production, distribution, trade and consumption of goods and services. Economics is said to be normative when it recommends one choice over another, or when a subjective value judgment is made. Conversely, economics is said to be positive when it tries objectively to predict and explain consequences of choices, given a set of assumptions such as observations or policy objectives. The choice of which assumptions to make in building a model as well as which observations to highlight is, however, normative.
- Economics, which focuses on measurable variables, is broadly divided into two main branches: microeconomics, which deals with individual agents, such as households and businesses, and macroeconomics, which considers the economy as a whole, in which case it considers aggregate supply and demand for money, capital and commodities. Aspects receiving particular attention in economics are resource allocation, production, distribution, trade, and competition. Economic logic is increasingly applied to any problem that involves choice under scarcity or determining economic value.
- The mainstream economic paradigm is a combination of neoclassical economics and macroeconomics called the neo-classical synthesis. Various schools of heterodox economics seek to explain economic phenomena using different assumptions, formalisms or basic paradigmatic assumptions.
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Economics from Wikipedia |
Prelude: Now Money may be a sort of common sense place to begin to approach economics but I believe a social contract view that sees human value (individual balanced with collective), community good, science and technology, biosphere limits and sustainability as necessary conditions that surrounds the value given to stuff and the medium by which we exchange stuff (goods and serves). Any economics then needs to consider ethics first (what is least harm?, what is fair? What is optimal good? How do we reckon these issues?) as it underpins politics (how shall we live together?) and politics as it underpins community (including business and markets) Knowledge (science, arts, crafts) and the biosystem, the limits of planet to sustain optimal human life. So how does money fit here?
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Money
Money is any marketable good or token used by a society as a medium of exchange, store of value and unit of account. A currency is a unit of exchange, facilitating the transfer of goods and services. It is a form of money, where money is defined as a medium of exchange (rather than e.g. a store of value).
1. How do you define value? [1](This might be too abstract here. Needs contextualization of human good in community and in natural world.)
2. Does the US Dollar need to go back on the Gold Standard? [2] Better what actually sustains the US dollar when so much of our goods and services are being bought up by foreighn dollar holders?
3. How should we define inflation? The Federal Reserve raises and lowers the interest rate based on inflation (perceived or real). Currently it is based on a standard “basket of goods” but this basket can vary greatly from person to person (e.g. the cost of education increased dramatically during a time of “low inflation”). Should it be based on the increase or decrease in the money supply (e.g. more money chasing the same products drives up the price)? [3]
4. Will we ever see stagflation again like we did in the late 1970’s (i.e. double digit interest rates, unemployment, and inflation)?
Taxation
Taxation’s two primary purposes are to raise money to run the government and to influence behavior. The US federal government budget is nearly 3 trillion dollars and how it collects this money impacts the health and well being of its economy.
1. Does the government give you money when you receive a tax refund or are they returning your money? What do most American’s think?
2. How do you define what is “fair” when it comes to taxation (tax on earned income, passive income, wealth, or sale of goods)? Characteristics to consider: - How easy is it to cheat? - How transparent does it need to be? - What about the underground economies (e.g. illegal drugs, illegal immigrants, etc.) - Does it encourage good or bad behavior (e.g. saving money versus spending)? [4] - Does it make us competitive globally?
3. Is the current Progressive Income Tax a fair method? (the more you make, the more you pay plus the percentage rate at which you are taxed is higher). - Does it punish good behavior of being productive? - Does this help narrow the income disparity gap (i.e. rich versus poor)? - Does its complexity make it fair or unfair (e.g. special rates for special circumstances)?
4. Is a “Tax on Wealth” a fair method? (you only pay taxes on property owned (i.e. car, house, etc.)). [5] - Do you really own your property if you have to keep paying the government to keep it? - Does this really help the poor since they do not have wealth or will the rich just pass the tax on to them (e.g. through rent, cost of products sold, etc.)? - Does this help to address concern that the income tax method only taxes a select group (i.e. workers who earn an income)?
5. Is the “Flat Income Tax” a fair method (everyone pays the same percentage on their earned income after a specified amount (~$40k); this is bill H.R. 1040).? [6] & [7] & [8] - Will this just turn back into a Progressive Income Tax? - Does this help to encourage personal savings? - Does this less complicated tax method promote fairness?
6. Is the “National Sales Tax” a fair method (everyone pays the same percentage on purchased goods and receive a pre-bate from the government to cover staples (i.e. food, housing, etc.); this is bill H.R. 25). [9] [10]& [11] - Is this a fair tax because it taxes everyone, not just income earners? - Does this help to encourage personal savings? - Does this less complicated tax method promote fairness?
Role of Government
In order to discuss how a government spends money, we first need to determine the fundamental beliefs and assumptions directing a government’s actions.
1. Which is most valid, the public interest theory of government or the private interest theory of government? As you go down the list, discuss how your answer to this question motivates your answer to the other questions in this section.
2. Government needs money to exist, so what are the principles driving its existence? Should we create a principle system similar to Maslow’s Hierarchy of Needs? [12] For example, the number one principle for Adam Smith is “security” [13] and for Carl Marx it is “social welfare” [14]?
3. Should there be a set of rules for deciding on how the government spends money? For example: · Does it make us more secure (i.e. militarily, FBI, etc.)? · Does it make us more prosperous (i.e. infrastructure like the interstate system)? · Is it a proper role of the government (i.e. National Boxing Commission)? [15] · Spending ratios based on categories (e.g. 40% on security, 40% on welfare, 20% on Foreign Aid)
4. Should national governments pay for local projects that are usually the responsibility of local governments like Boston’s big dig? Should local governments pay for projects like sports stadiums/arenas? [16]
5. Does business drive the economy or does government?
6. Should the government own the banks or should they be privately owned? What about other industries like airlines or oil?
US National Budget
The rationale behind where our politicians spend the nearly 3 trillion dollar US federal budget is not transparent.
1. Are the yearly budget deficits a result of spending too much or a result of not collecting enough taxes? [17] & [18] & [19] · Do “pork barrel spending” projects create budget deficits? [20] · Does tax invasion create budget deficits?
2. Should we make balancing the budget a law? · Does it matter that the US Treasury can easily create money by issuing debt (T-bills) and only service the interest?
3. Should the US government continue to spend billions of dollars on Foreign Aid (e.g. $6B for Israel)? [21] & [22] & [23]
4. Should the US government continue to spend billions of dollars to subsidize US farmers (e.g. $2B for cotton farmers)? [24] & [25]
5. Is the federal government responsible for everyone’s retirement (citizens and expatriates)? Is there a problem with the Social Security system? If so, what needs to be done to save it?
Government Control
The US economy is dependent on the health of US business and the government is responsible for setting up the rules and conditions in which business operates. So, the wrong rules can harm the economy and the right one can make it prosper.
1. Should we continue to support Free Trade even though our trade deficit is widening and jobs are moving overseas? · Should we support tariffs?
2. Is the Sarbanes-Oxley Act (SOX) good for USA business? · Do these new rules really help fight corporate corruption? · Does the increase in transparency (perceived or real) help justify the increased cost (some companies have to spend over $10M to adhere to SOX)? [26] & [27]
3. How should governments balance the “environmental protection” needs with the “economic and security” needs of our country? · Will we increase the security of the USA if we are able to stop importing oil from the Middle East by drilling for oil off of our coasts and in Alaska? · What are the environmental impacts of drilling in protected areas like Alaska and the Gulf of Mexico? Is it worth the risk? Is Mexico and Canada negatively impacted for drilling in similar areas? [28] & [29] & [30] & [31]
4. Should the government subsidize specific industries or support price control (e.g. agricultural products)?
5. Should the USA government break-up monopolies (or oligopolies) even though it benefits the USA in a global market place (e.g. Microsoft’s operating system)? [32]
6. How broad should government's power of “Eminent Domain” be in taking away private property? Should it be used to increase a local government’s tax base? [33]
Global Issues
All the economies of the world are interconnected and the cornerstone of the global economy is the USA’s economy.
1. Will the Euro help or hurt the US dollar? [34]
2. Will the large USA trade deficit ultimately cause economic problems? Every year, billions of dollars leave the USA to pay for imported products which could lead to a major recession. [35] Meanwhile, these billions of dollars are going into developing countries’ economies which could lead to hyperinflation. [36]
3. Is the world economy at risk to terrorism? The collapse of the World Trade Center towers affected businesses that were thousands of miles away from NYC. These companies were Reinsurance companies and they went under because they insured the companies who insured the property that was destroyed in the attack. Even a company that was a 40th level reinsurer went bankrupt. [37] & [38]
4. Now that it’s easier than ever to travel and to work anywhere in the world, will people move to areas that are “business” friendly? We are entering into an age of the Sovereign Individual (i.e. an individual acting as a country without a border). The most popular example of this is Osama bin Laden’s al-Qaeda organization which uses high tech satellite communications and international banks to easily move from country to country. [39]
5. Is the way we count things and services fundamentally flawed? Markets set relative value but what of the goods and services not marketed? Women’s work in the home is not counted. Water in pipes is counted, water dammed for energy but not free flowing water. The importance of the natural world to our survival is recognized as resource but is not marketable until “developed.” But markets more likely make lumber in development (not parks) out of forests. We do not consider the cost of replacement and sustainability in how we value products taken from the world. Uncontrolled markets have destroyed the world’s fisheries. Global warming may make the sustainability of forests infeasible. These trends will impact our quality of life to the degree that basics such as potable water, adequate transportation, and housing may become premium and scarce and irreplaceable. How will this affect markets? How should economics change to address these issues? Should economics be prescriptive to limited expectations instead of projecting unlimited growth (wishdom?) in a limited ecosystem?
6.Individual ethics, interpersonal ethics is the basis of sound political theory. By implication, our economics, how we create wealth and value and circulate and accumulate it should have an ethical dimension that is central? How can we make that more prominent in our political discussions? Laws have an ethical dimension. Courts that do not consider the ethical implications of laws upon people are not serving the community good (defined in part as moral and fair).
Economics and politics are hand in glove. Many economic issues are posed through political questions. However the majority of the world’s wealth is corporately held, owned by very few people. How do the democracies call into account massive transnational corporations? How does this impact significant ecological awareness?
