POSC 100 Week 2 Notes
POSC 100 Week 2 Notes POSC 100-04
Long Beach State
Popular in Intro to American Government
Popular in Political Science
This 5 page Class Notes was uploaded by Camryn Hohneker on Saturday September 10, 2016. The Class Notes belongs to POSC 100-04 at California State University Long Beach taught by Professor Larry George in Fall 2016. Since its upload, it has received 170 views. For similar materials see Intro to American Government in Political Science at California State University Long Beach.
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Date Created: 09/10/16
Week 2 The United States The US has a GDP of about $16 trillion a year US is the wealthiest society in history Even a fraction of this wealth can accomplish a tremendous amount if spent on public programs This is why most political disputes today are on how the gvmt is going to spend that money Where They Get This Money Federal budget: $3 trillion (out of $14 trillion national economy) Raised through Taxes o But tax revenues are hard to generate because Taxes must be approved by congress Unpopular with voters (specifically wealthy Americans because they will pay more in taxes) This is why being wealthy in America makes you more politically influential Larger shares of taxes are paid by the middle class o As a result, the government often resorts to borrowing money What the Government Can Use Money For Tax cuts: can be returned to taxpayers for their own private consumption (common in the beg of the 20 century) Military and security expenditures: can be spent by gvmt on military, police, prisons, etc. Civilian services and social programs: education, health care, economic “safety net” national parks, museums, etc. (for the welfare of the people as a whole) CASE STUDY: The Federal Government’s Options in 2005 Fed gvmt had $300 billion left over at end of the fiscal year Congress & President had to decide what to do with these funds (out of the three options: tax cuts, military and security expenditures, or civilian services) o Each three options were strong with certain ideologies (limited gvmt, security hawks, social programatists) What really happened: o A tax refund (this will be on the exam) o Most of the tax refund went to the top 8% of Americans bc wealthy people paid MORE in taxes (bc they earned more) o Most Americans, by contrast, received only $400 The military spending option (should they have chosen it) o Gvmt could’ve paid off that years defense budget o This money was going to be spent anyway bc we were at war o Since it was used as a tax refund, we had to borrow that money and we still owe it LOL Paid via taxes Civilian social programs options (could do ALL of these) (should they have chosen it): o Provided healthcare for all uninsured children in the US o Cleaned all remaining large toxic waste pollution sites in the US o Hired 100,000 teachers, o Repaired schools o Provided teachers o Close all state budget gaps o End homelessness in ten years Summary: Modern governments can do a lot w their taxing and spending powers: They can stimulate private consumption by refunding taxes They can defend the country They can implement social reconstructions 2008 United States Response to Financial Crisis o What Bush and Obama did Spent 700$ billion to bail out major banks, insurance, and auto companies Alt. they could’ve invested in education and health care, creating 3-4 times as many jobs as their choice Government Spending Creates Political Controversies o It affects all Americans o Some groups will benefit and others will not o How the gvmt decides to spend the money is determined by politics (competing interest groups in gvmt) Three case studies: (know them for exam #1 , pages 3-13 in textbook) Government and the Economy US vs Western Europe Comparisons o Similar politically and economically o But western EU and US balance gvmt and business differently (Britain France Scandinavian, Austria, Italy Canada) Similarities o Both are very rich o Both are capitalistic market economies (free market capitalism: business makes profits and spend money and hire people as they please.) o Both have constitutional democratic gvmts. 1. Very stable with no revolutions; people support the government o Both about same size and population o Both are subject to the same global economic pressures 1. But it affects the pal differently depending on how gvmt spends that money Differences o US democratic capitalism is “conservative” view o Western EU of democratic capitalism is somewhere between “liberal” and “democratic socialist” views discussed in textbook o (look these terms up) if necessary US Model o Laissez-faire Capitalism: weak government model o Government does NOT interfere much with activities of businesses o Businesses are generally free to sell what they want, hire and fire at will, pay lowest wages market will bear (minimum wage), invest and move capital where they want to US Regulations o relatively little gvmt regulations of businesses corporations 1. working conditions: hours, vacation time, family leave, etc. set by the market not by the gvmt o wages and benefits set by the market o product content only lightly regulated Taxes (US) o US citizens pay about 1/3 less in taxes than in EU o Low taxes on businesses and the wealthy 1. American businesses and wealthy individuals pay lowest taxes (with very few exceptions) US “Welfare State” o The US has a minimal economic “safety net” 1. Only short term income compensation for unemployed people 2. Very limited public assistance programs 3. Direct income support only for children and single mothers 4. Social security (for seniors) is the only major American anti-poverty program “You’re On Your Own” Ideology o US economy is HIGHLY individualistic o Gvmts purpose is NOT to help people but to stay out of their way o Individuals are responsible for their own college education, job skills, health care, retirement (beyond Social Security), emergency funds, catastrophe and disaster relief o This is different from many other Western EU countries o Polls show that Americans would like the gvmt to do much more in the economy than it currently does 1. Such as more jobs 2. Affordable health care dental and vision care 3. College education affordable 4. Affordable home ownership near work 5. Safer schools and neighborhoods 6. Better transportation system 7. More parks, museums, and recreational facilities Where Tax Money Actually Goes o Significant percent (10-15%) goes to pay off debt and other obligations o 3 distinct gvmt programs that are different from those in other rich, developed countries: 1. Education: Funded through state gvmts (1% of fed. Gvmt every year. Rest is state gvmt.) Local school shortfalls are supplemented by parental donations Education quality depends on your state of residence, and whether you live in a wealthy neighborhood Education budget focused on higher education This leads to very poor K-12 schools for bottom 1/3 compared to other rich democracies, and American college grads are the best prepared in the world 2. Law Enforcement and Prisons US imprisons more people than any country in the world Europe: 87 pris./100,000 citizens US: 685 pris/100,000 citizens (about 8 times as many Approx. $25k a year per prison inmate US spends more on police and law enforcement than any other country 3. Military, defense and national security US Spends much more on this than any other country Part of this is because of the Cold War Much of US military spending involves projecting US power and influence in the other parts of the world Social Security Social security (income support for seniors and the disabled) is another big program, but is self- financing It does not come out of our taxes Summary: The American model of democratic capitalism is based on (what is different than the Western European model): o Individual independence o A very limited gvmt role in economy o High expenditures on security (police and military)
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