The Three Main Economic Questions :
What goods and services should be produced?
How should these goods and services be produced?
For whom should these goods and services be produced and distributed?
What goods and services should be produced?
How should these goods and services be produced?
For whom should these goods and services be produced and distributed?
Trade-off
Every time a nation, group or individual faces the ECONOMIC QUESTIONS, a choice is made that has a direct impact on individuals and the potential for a trickle-down economic impact (on industry, society, the economy as a whole, etc.)When choices are made (collectively or by an individual) to accept having less of one thing in order to get more of something else, the results are called trade-offs. For example, when one is allocating (limited) funds, the trade-off usually involves reduced spending for some purposes in order to be able to spend more for other more urgent purposes. However, the concept does not apply only (or even primarily) to decisions involving money. A student faced with the choice of spending Saturday studying for a Political Economy exam or shopping at The Mall makes a trade-off of shopping time for study time in deciding how many hours to study and how many to spend shopping. Society also makes trade-offs -- such as, for example, between its need for a more plentiful supply of energy and its need to prevent excessive deterioration of the environment caused by energy production technologies. Evaluating trade-offs, when done carefully and systematically, involves comparing the costs and benefits of each of the available alternatives with each other.
Every time a nation, group or individual faces the ECONOMIC QUESTIONS, a choice is made that has a direct impact on individuals and the potential for a trickle-down economic impact (on industry, society, the economy as a whole, etc.)When choices are made (collectively or by an individual) to accept having less of one thing in order to get more of something else, the results are called trade-offs. For example, when one is allocating (limited) funds, the trade-off usually involves reduced spending for some purposes in order to be able to spend more for other more urgent purposes. However, the concept does not apply only (or even primarily) to decisions involving money. A student faced with the choice of spending Saturday studying for a Political Economy exam or shopping at The Mall makes a trade-off of shopping time for study time in deciding how many hours to study and how many to spend shopping. Society also makes trade-offs -- such as, for example, between its need for a more plentiful supply of energy and its need to prevent excessive deterioration of the environment caused by energy production technologies. Evaluating trade-offs, when done carefully and systematically, involves comparing the costs and benefits of each of the available alternatives with each other.
Opportunity cost is defined as the value of the sacrifice involved in a trade off – in other words what you give up in a an economic decision. Most choices are not all-or-nothing decisions; rather they typically involve small changes at the margin -- a little more of this at the cost of a little less of that. Consumers continuously practice marginalism and make trade-offs as they consider whether to buy one more unit or one unit less of a good or service in their efforts to obtain a mix of goods and services that afford them the greatest satisfaction for their available buying power. Producers must constantly be deciding (and reevaluating) their trade-offs in choosing whether to produce somewhat more or somewhat less of a particular product, whether to add a few more workers or lay a few off, whether to invest in more plant and equipment or whether to close down some of existing capacity, and so on -- in their efforts to maximize profits.
This week's choice assessement asks you to look at key trade-offs in US history and evaluate the wisdom of those decisions on a policy level and matters of popular (citizens) choice.
Directions – Actively read the “US Economy: A Brief History” summary at:
- Identify THREE moments/ periods in US history wherein individuals in US society and/ or the government as a whole participated in or was affected by an economic trade off.
- What was the opportunity cost of this decision?
- Did it advance or restrict social and economic progress at time when this decision was made?
Your assignment may take the form of:
A blog or typed assessment of 250 words or more
A visual chart/ graphic organizer/ comic strip or timeline reflecting all of the ideas above
A media analysis blog, poster or paper that summarizes the information in a minimum of 150 words and connects the information in the article to that of a recent newscast (include time and date of broadcast or article)
Anthony Fontana
ReplyDeleteBlock C
During the 1980’s, the United States was in an economic recession do to high government spending and the Vietnam War. Then actor Ronal Reagan was elected to presidency. In order to pull the economy out of this recession, Ronald Reagan developed a plan to, reduce government spending, give tax breaks, reduce government intervention, and reduce the printing of money to reduce inflation. This policy was called Reaganomics. There are a lot of trade offs here. The government has to reduce its spending. Therefore, weakening its public works spending. The opportunity cost here was that people had less of an economic insurance policy; however this allowed the economy to grow and prosper and an exponential rate. Aside from restoring the economy, Ronald Reagan had another task to accomplish, to defeat the Soviet Union. After Vietnam, Reagan felt that the military was under funded. So he allocated more funds to the military. In order to bring down the Soviet Union, Reagan had to spend more money on making weapons then other funds. The opportunity cost here not being able to spend more money on social service program. After World War One, the United States plunged into the worst depression, yet, in United States history. Franklin Delano Roosevelt was sworn into office and faced with such a problem. President Roosevelt had a plan called the New Deal, which consisted of many public service programs. This helped get the morale of the people and pull the companies of debt and bankruptcy. However, these public service programs and bailouts have a huge opportunity cost. The opportunity cost of this plan is that the government will have a large national debt, in the future people will be paying for this package with a ton of taxes, and the government will not be able to spend too much on defense.
Heather V.
ReplyDeleteBlock F
During the time Alexander Hamilton became America’s first ever secretary of treasury, he advocated a strategy in which the federal government would nurture small industries by providing financial assistance and imposing protective tariffs on imports. In addition, Hamilton pushed the federal government to create a national bank and to assume public debts that colonies earned during the American Revolution. Hamilton ultimately invited tariffs to become a big part of foreign policy. The first National Bank of the United States was chartered in 1791. Hamilton believed the United States should pursue economic growth through diversified shipping, manufacturing, and banking.
On the other hand, Thomas Jefferson believed protecting the common man from political and economical tyranny was more important. Thus in 1801, a trade-off seemed to have occurred as Thomas Jefferson became president and promoted a diverse, agrarian democracy. Jefferson viewed small farmers as the most valuable citizens and thus focused his political ideas to benefit the common man economically. While Hamilton called for more government intervention with the economy, Jefferson called for less government intervention. Jefferson’s famous quotation “The government is best which governs least”, greatly reflects his ideas and how American history went from an individual who promoted big government to an individual who promoted small government.
Another period in US history where an economic trade-off took place was during the years 1834 and 1837. With Andrew Jackson as president, he opposed the renewing of the bank’s charter. As a result, business panics occurreds and many lacked confidence in the nation’s financial system. Without the National Bank, people didn’t know whether they could trust America’s financial stability. Evidently this trade-off had a positive impact. New inventions and capital investment led to the creation of new industries and economic growth. As transportation improved, new markets opened. Also towards the end of the Civil War, America experienced a big trade-off as the slave-labor system was abolished. The large southern cotton plantations suffered greatly, as they lost a large amount of profits. On the other hand, the northern industry greatly benefitted as industrialism sky-rocketed and the economy developed. As industry grew larger, it developed mass-production methods. The American economy matured, and took capitalism into great consideration.
Ultimately, all of these decisions advanced social and economic progress. As a developing country, America had to try out different economical plans in order to find out which one is best. These trade-off’s allowed America to experience how different economical decisions work and their affect on every class across the country. To this day we are still learning more about America’s economic system. This continuous trade-off will ultimately advance our country as we learn from trial and error.
Justin Lefkowitz
ReplyDeleteI made a graphic organizer
Cherricka
ReplyDeleteFrom the 16th century to now the US has had a shaky economy. There were times the economy was stabled, but there were also times of crisis. It all began with the Vikings, who were the first Europeans to discover America. Then there were numerous settlers, mostly from Europe, who came to America looking for a new life. Since then there has been wars colonization, recessions. And there were trade-offs. A trade-off is when you accept having less of one thing to have more of another. This may sound simple, but with America's growing population trade-off is the most difficult thing to do. You would have to think: what do we, as a country, need more of, A or B? During the past five centuries trade-off either helped or destroyed America's economy. It is all about making the right decisions quickly.
During the years of colonization fishing was a source of wealth. People living in these small cities lived better than most. Knowing so they were imported some luxuries in return for tobacco, rice, and indigo. Luxuries are always good to have, but this was not necessarily the best idea. Careless sending during this time may have been the reason for later debts. During colonization people were still trying to build up their cities, so money was not really an issue.
The economy in the 1980's went through a deep recession. The percentages of bankruptcies reached an all time high and agriculture was failing. Ronald Reagan was president and his answer to the recession was to reduce tax rates so people could keep more of what they earn. Reagan believed that lower taxes would persuade people to work longer and harder. Also, he hoped that the people would save and invest to make more money and keep the economy running smoothly.
During the presidential term of Bill Clinton the economy was getting better. He helped market forces, reduced welfare benefits, and he reduced the size of the federal work force. Bill Clinton's terms of presidency is the perfect example of trade-offs. Although, his plans affected the middle class in the worst way, it later became helpful for the economy. Clinton had to get rid of some things in order to get better thing. As the 90's continued there was a progress in the economy. Everything began to rise. Trade-off has its ups and downs, but the US has always seem to recover. Hopefully, we do the same this go round.
Loretta Au
ReplyDeleteMarch 1, 2009
Block F
Since 1787 the U.S Constitution has been in effect. Among the constitution’s wonders is its representation as an economic charter that established the nation was a common market. The constitution allowed the government many powers, for example, to regulate commerce with foreign nations and states, established uniform bankruptcy laws, crate many and regulate its value. At the time the nation had its first secretary of treasury, Alexander Hamilton. Hamilton believed the United States should pursue economic growth through diversified shipping, manufacturing, and banking. Hamilton encouraged the government to create a national bank and take on debts from the Revolutionary War. The first national bank was created in 1791 and lasted until 1811 due to a successor bank. Hamilton also advocated an economic development strategy in which the government would support new businesses by providing over funds and imposing protective tax on goods. Despite Hamilton’s efforts, the government did not incorporative tariff into the American foreign policy.
In 1829, came along President Andrew Jackson. In response to the successor to Hamilton’s National Bank, Jackson believed it favored the fixed interests of the East against the West. During Jackson’s second term, he opposed renewing the national bank’s charter. Congress’ actions to advocate Jackson’s views caused instability to the nation’s financial system and ultimately caused the business panics in 1834 and 1837.
Industrial growth began in the late 18th century. During the Industrial Revolution was Abraham Lincoln’s presidential term. Many during the revolution were poor because most of the nation’s income was from manufacturing. Most people were European immigrants who remained in eastern cities. The South was dependant on the North for goods. In 1861, Congress pushed protective tariff, followed by a railroad and a national bank code. Next was the Civil War between 1861 and 1865, which affected the economy drastically. President Lincoln abolished slavery. Which made the southern cotton plantations less profitable. Northern industries surged ahead due to the demands of the war.
Although many of the nation’s trade offs had negative opportunity cost, they a;; advanced social and economics progress. As long as new action and effort is invested into the economy, there will be social and economics progress. As a young nation, the nation continues to try different plans. With each faltered plan, the nation continues to persevere, which will ultimately progress into success.
Shaun Quinto
ReplyDeleteA-Block
Throughout history there have been many trade-offs in America. One of the most important economic periods in this country’s history was when the Constitution was ratified in 1787. From that period on, we needed to set up an economy that would work quickly and efficiently, and would eventually become a strong foundation for the economic woes in years to come. When Alexander Hamilton became the first secretary of the treasury department, he faced many trade-offs, and was criticized by many for the opportunity costs. For example, Hamilton wanted to create a clear financial assistance plan. He created a national bank system in 1791 but in many people’s eyes it was a trade-off with a tough opportunity cost. He was helping the small industries that were developing, but in no way did it help the everyday farmer. In the eyes of Thomas Jefferson and American farmers, the rich were being helped at the expense of the everyday farmer and the poor. Although there was criticism, Hamilton’s economic trade-offs helped the economy grow with economic and social development. He created stability in the economy with a banking system, and let society grow along with the economy. During the Great Depression, President FDR faced many more trade-offs which also faced a lot of criticism. The economy was destroyed and it was his job to stimulate it; he created the New Deal to help the average American and build confidence back into the economy. He created minimum hourly wages, the SEC, the FDIC, and even Social Security. America’s economy was designed to be a free market economy. FDR’s trade-off was whether to sacrifice the principles of a free market economy for the good of the people. The opportunity cost was that America began to have more economic regulations. Even though there was government intervention, social and economic progress boomed as FDR took the country out of the Great Depression. In the 1980’s, Ronald Reagan returned the nation’s economy to a more capitalist style. He reduced taxes and reduced regulations and government intervention. The trade-off that Reagan faced was very difficult. Was he to cut domestic spending and focus on fighting the Cold War even though he would put the country in debt because of his tax cuts? He could’ve raised taxes and had enough to fight off the Soviets, but he decided to leave taxes low. The opportunity cost he faced was that the country’s national debt more than doubled during his presidency. Economic trade-offs have been a part of America’s history. In order to be a successful economy you need to make the right decisions and weigh the opportunity costs with the benefits of the trade-off. A great country, like America, fights through the opportunity costs, and is still able to thrive.
Throughout history economic tradeoffs have been taking place to better a society, in some cases it works and it some it does not.
ReplyDeleteOne example of an economic trade of in the United States was during the colonization of English settlers in Jamestown. Their efforts at colonizing Jamestown, would soon become what we know today is the United States. Charter companies are groups of stock holders who were usually merchants and wealthy land owners. Using charter companies helped the development of the United States. These companies were given political and judicial authority by the king. These companies often did not work and the settlers were left to build their own lives, eventually leading to the growth of the nation. Using the charter companies benefitted the United States, because it forced the nation to grow and become a country.
The United States constitution, adopted in 1787, allowed the nation to build. At this point there were no taxes on interstate commerce and declared that the federal government would be in charge of money. This included trade, inside and outside of the nation’s borders, bankruptcy laws, the making of money, from the printing of it and the value of it, as well as establishing postal offices and routes, patents and copyrights.
After the civil war, society boomed in industrial growth and economy. Discoveries and inventions were taking place left and right. From the change of carriages to cars and airplanes, the use of refrigerated railroads carts, telephone, and the electric lights, evolved the nation’s economy and standards. Along with these advances, other advances were being discovered such as coal that was being discovered in mountains. The discovery of the coal led to the use of steel in factories, allowing products to be made quicker and profit earned faster as well. Because of the growth of mass production, workers salaries were bumped up to $5.00 a day and they were able to by the cars and products they were making, and others would follow suit and buy them as well.
The advances that were made throughout history have allowed the nation to grow and advance society, both for good and in some cases bad.
Samantha Goodman
Block C
The biggest economical crisis in the United States was the depression in the late 1920s. During the Great Depression, tradeoffs were made in order to attempt to end the depression. In 1929 the stock market crashed, leading to “the most serious economic dislocation in the nation’s history.” In order to help solve this problem, President Franklin D. Roosevelt created the New Deal. The New Deal extended federal authority in banking, agriculture, public welfare. It also established minimum standards for wages and hours on the job and expanded labor unions. It increased productivity and efficiency to resolve conflicts. However, all of Roosevelt’s attempts to help save the economy, didn’t come without an opportunity cost. The opportunity cost of the economic advantages, was that the principles of a free market were jeopardized with all the government interference. However, even with the opportunity cost, Roosevelt helped save the economy which advanced economical progress.
ReplyDeleteDuring the presidency of Ronald Reagan, he created an economic program on the theory of supply side economics. This theory reduced tax rates so people could keep more of what they earned, by encouraging them to work harder and longer to make more money and savings. However, this mainly benefited the wealthy. He simultaneously “slashed” social programs, and increased military spending. The opportunity cost for Reagan was that the federal budget sky rocketed.
After World War II, the despite fears of another suffering economy, the economy actually flourished. The “baby boom” occurred, which increased the numbers of consumers, and a “housing boom” made mortgages very affordable. However, America was drastically changing during this period. During the 1950s, the number of workers providing services grew so drastically, it passed the number who produced goods. Business also improved, and firms merged to create huge companies. However, all of this positivity for workers, led to an opportunity cost for farmers. Farmers faced tough times because farmers also became a big business, leading to hardships for small family farms.
Throughout America’s history, many economic tradeoffs have led to opportunity costs. Luckily, the country has always recovered and hopefully will continue to do so during this time of economic recession.
Sarah Berfond
ReplyDeleteF Block
Three moments/periods in US history where society and/or the government participated in an economic trade off were the years after the Great Depression, the early 1960’s and the 1980’s.
In the period after the Great Depression the Roosevelt Administration instituted a series of policies to create jobs and instill confidence in the American financial system. The government participated in the first great trade off In US history. They spent an enormous sum of money on the banking, agriculture and public welfare systems. During the Great Depression millions of jobs were lost, but the New Deal sought to replace those jobs with government employment. The opportunity cost was small compared to the success it created in turning the economy around. Although a lot of money was spent, it had a beneficial effect. With more jobs people spent more money and slowly increased economic activity.
In the 1960’s Presidents Kennedy and Johnson attempted to fight a war in Southeast Asian, Vietnam, and fight a war on poverty at home. These two battles cost billions of dollars and the government did not want to raise taxes, in fact they lowered taxes. The trade off they made to spend money without raising taxes caused inflation to rise throughout the 1960’s and 1970’s. The opportunity costs of fighting the Vietnamese and the war on poverty were great and the nation suffered for it.
During the 1980’s President Regan’s administration and Congress agreed to make some major trade offs. They decided to lower taxes and substantially increase military spending and cut social programs. One of the opportunity costs of these actions was a dramatic increase in the federal budget deficit and an increase in the hardships face by low income citizens. Although the policy ultimately defeated communism and created an increase in economic activity it took its toll on the less privileged.
Qulemi Johnson
ReplyDeleteThe History of the United States is well known for many economic tradeoffs prepared to better the economy. The ratification of the US constitution took place in 1787 and this is what began forming structure of the United States economy. It established a strong foundation for the economic structure that would be a strong "common," market. Alexander Hamilton was appointed the nations first secretary of the treasury. Hamilton advocated an economic development strategy in which the federal government would impose protective tariffs on imports and also provide overt subsidies to nurture new coming industries. He imposed the idea of the nation creating federal government to create a national bank and to assume the public debts that the colonies had incurred during the Revolutionary War. The first national bank was created in 1791 and eventually failed.
In 1829 when Andrew Jackson was in office he opposed renewing the national bank’s charter because he believed it favored the entrenched interests of the country divided and was supported by Congress. At this point the US was off to bigger and better opportunities. New inventions and capital investment led to the creation of new industries and economic growth. But so called “get-rich-quick schemes” became more and more common everyday as financial manipulators made fortunes overnight while other lost large amounts of savings. When the Industrial revolution began in Europe the late 18th and 19th century it quickly spread across the seas to the United States. By 1860 Abraham Lincoln was elected president. The Civil War had them began in 1861 leavening the north victorious and sealing the destiny of the US economic system.
After the First World War the United States economy worsened and US went into a Depression. President Roosevelt, who was in office at the time, had a plan called the New Deal. The New Deal consisted of many public service programs which helped to put the country back on track.
tarina meaders
ReplyDeletec block
3/1/09
When problems arise in society big decisions must be made in order to benefit this country, especially when the issue has to do with the economy or the depletion of an important source.
Throughout American history a few trade offs had to be made in order to save money,lives and to get America back into a stable state. A trade is when a sacrifice has to be made in one area in order to gain more of something another area. After World War I the Great Depression sent many families into poverty because of the lack of money circulating around. A Trade off made to help the economy bounce back was of course The New Deal proposed by Franklin D.Roosevelt. First, Roosevelt gave jobs to the unemployed during the depression and set wages and standard hours for workers. He also created the Securities and Exchange Commission, which regulates the stock market; the Federal Deposit Insurance Corporation, which guarantees bank deposits; and,the Social Security system, which provides pensions to the elderly based on contributions they made before they retired.The opportunity cost of the New Deal was the sacrifice of the more dominant middle class for the fairness and prosperity of the working class. The Roosevelt administrations plan was very beneficial to the U.S. because it obviously helped dig us out of the rut that a war threw is into.
The second historical trade off was Dwight D. Eisenhowers decision to produce sophisticated war weaponry such as the hydrogen bomb which led to The Employment Act of 1946, its mission being "to promote maximum employment, production, and purchasing power." This probed the American work-force to change greatly because of the sudden consolidation of capitalist companies. Since businesses like companies like Rent-a-Car,Hartford Fire Insurance,and Continental Banking were prospering, farmers who made a living off of how they lived, were suffering and turning to more modern ways of making money. Simply, blue collar workers could not keep up with the white collar enterprises. The opportunity cost in this situation was the benefits of The Employment Act over the earnings that farmers so greatly deserved.
During the 1950's and 60's decisions still had to be made even though this time was laid back and society was feeling complacent.Lyndon Baines Johnson created the idea of Great Society. He sought to spread Americas wealth to more people. As national spending increased the government launched Medicare (health care for the elderly), Food Stamps (food assistance for the poor), and numerous education initiatives like grants to colleges and schools. This decision was incredibly helpful and bright of President Johnson because even though these programs were created years ago, they still continue to help Americans each and everyday and are always going to be fought for. The Great Society opportunity cost was more spending of the federal budget in exchange for helping others in need and prolonging lives.
Hopfully I provided three worthy examples of 'a little less of this for a little more of that' for our countrys history.
Mike Orr
ReplyDeleteC Block
Throughout history, there were many tradeoffs that took place, one of which took place in the 60’s, when Lincoln abolished slavery. He traded his old life, and transformed it into a new economy, which he was not sure would even work. He took many chances, and was so sure it would work so he traded it all to start an entirely new economy. In return this is what added the 13-15th amendment.
Another trade off would be the New deal by Franklin D. Roosevelt. Which he put out within his first 100 days in presidency. What he did was he traded a completely new set of reforms, to help fix the stock market and the overall economy. The economy was almost as bad as it its now, perhaps worse, and fixed the economy. And a third Trade off that happened would have to be Reaganomics, by Ronald Reagan. This plan was also one to restore the economy, mostly by reducing the governments pending, which also reduced the spending of businesses. Also many people lost their insurance policies. His plan worked, and the economy grew once again, and so did his army. They defeated the Soviet Union. In my opinion, if these ideas worked then, then why don’t were try and do something like that now before everything gets worse. Not like it can. It’s a good suggestion=]
Economic trade-offs started when our Constitution was ratified in 1787, enabling our great nation to set up its own economy free from the control of the British Empire. Alexander Hamilton, our first secretary of treasury, decided that government intervention in the economy was necessary to keep it working well. He established a national banking system and encouraged the government to assist new industries, ensuring their success. Although many were trepid about these trade offs and were skeptical about whether or not the opportunity cost was worth it. However, Hamilton’s ideas continued to resonate in our economy for years to come.
ReplyDeleteFranklin D. Roosevelt’s New Deal included many economic trade offs. For example, under the New Deal, the minimum wage standard was created, therefore expanding labor unions in areas such as the steel and automobile industries. Also, the FDIC was established to ensure the people’s trust in the banking system and the government. These trade offs increased the government’s regulation in the economy (opportunity cost, in this case), but in the long run, it greatly benefited it and created more jobs, better wages, and better living standards for many people in the US who suffered from economic losses.
President John F. Kennedy’s approach to the economy was to cut taxes and increase government spending in areas such as elderly health care and education. The tax cuts were the opportunity cost. Although he never had the chance to enact these plans, Lyndon B. Johnson took over for him after his assassination and government spending significantly increased. Medicaid and the Food Stamp system was created, and spending in education augmented. Military spending increased, as well as the war against poverty within the US, however, because of the tax cuts, inflation rates increased of the lack of funds for all of the government programs. The end of the 60s and beginning of the 70s were marked by economic failures and high energy prices. In this case, the economic trade offs that Kennedy and Johnson created did not benefit the country.
Trade offs are an essential part of our economy, only if all the pieces come together and fit well. The government should assist the people in certain areas, such as education and healthcare, and taxes should be evenly distributed amongst the people. If the government continues to spend on the current war efforts, then it will be difficult for it to spend money in other fields, such as healthcare and education, while the peoples’ taxes are funneled towards the war. Also, if there continues to be major spending in areas such as the war, then tax cuts will be impossible for the people who need them. This time, if the Stimulus Bill goes as planned, then the economy will start pulling together and the government will not need to regulate the economy as much.
Anam Baig, F Block
Teresa Konopka
ReplyDeleteEconomics Independent Study
Blog Choice
Words: 441
One period that was affected by an economic trade off was the 1960s and 1970s. During this time, many emerging nations threatened to rival the US economy. So, Kennedy accelerated economic growth by increasing government spending and cutting taxes. He also urged medical help for the elderly, aid for inner cities, and increased funds for education. He even started the Peace Corps and expanded the space program. Afterwards, Johnson spent much money to initiate food stamps, Medicare, and educational leaps. Military spending grew, as well. Sadly, due to the government’s inability to raise taxes, inflation occurred. Oil shortages followed as embargoes popped up. However, the people continued to shop, unfortunately leading to debt and unemployment. Next, Carter established wage guidelines to quell inflation. Later, the government lessened its hold on interest rates and long-distance telephone service. Years later, a recession occurred.
Another period that was affected by an economic trade off was the 1980s. During this time, bankruptcies rose tremendously. Farming fell and interest rates rose. In this time, inflation began to lessen a bit. When Reagan became president, his economic play relied on the supply-side of economics. This reduced tax rates and encouraged people to work longer hours. It also encouraged more saving and investment, which resulted in heavy production and stimulus. Many of Reagan’s tax cuts benefited wealthy citizens and increased investment opportunities. Social programs were cut and man regulations were lessened. Military spending ensued and the federal budget deficit ballooned. Inflation was hindered by controlled prices. Droughts and floods hit farmers hard, and loan associations were inspected. Overseas economies rivaled US, while Bush tried to better failing businesses.
One last period that was affected by an economic trade off was the 1990s and beyond. During that time, Clinton used Congress to expand health-insurance coverage. He also strengthened the market by opening local telephone service to competition and reduced welfare benefits. When communism fell, international trade boomed. Technology developed and electronics expanded. Computer industries popped up as the economy grew. Fortunately, corporate earnings grew. There was low inflation and low unemployment, making the stock market surge. Farming declined and work in industry grew from store clerks to financial planners. The federal budget declined and tax revenues went up. Trade barriers were being eliminated and exports boomed as labor costs went down. At then end of the 90s, unemployment fell and consumer prices rose.
Student Comment: I liked Heather’s idea of trial and error economics. When I did the assignments, I merely noted the events, trade-offs, opportunities, and hard facts. I did not think to judge and analyze like that. Good job! ;)
Sylvia Shojai
ReplyDeleteBlock A
The first economic trade offs started in 1787 when our nation began its very own economy. The Constitution was ratified and Alexander Hamilton established a national banking system insisting that the government has to have a part in the economy for it to thrive. He was right and made sure that the government helped out the industries that were starting up. Despite the people’s doubts, Hamilton plan worked out well. The New Deal created by Franklin D Roosevelt was also made up of trade offs. The New Deal’s trade offs caused more government involvement with the economy, which is always opposed. However the trade offs actually benefitted the state of the nation. After the minimum wage standard was formed, labor unions also started to pop up in steel and automobile industries. This was a boost for the country; there were more jobs with better wages, and an overall improvement for the people. John F Kennedy’s plan had a different idea. He wanted to cut taxes and spend more on necessary services such as health care and education systems. He did not get to put this plan into action, and Lyndon B Johnson continued after him, drastically increasing what the government was spending. The government programs were backfiring, and the economy was falling into a slump. Government spending went to the military and education systems. The food stamp was created and the nation faced poverty. JDK and Johnson’s policies failed and left America in a pickle. Trade offs are important to have, but they have to be utilized properly. If government spending is mainly used up on the military, then the tax payers’ money is being misused and the people are not getting the results they need. Taxes should be put towards the school system and wherever else needs help.
In the 1980s under Reagan's presidency, the united states was recovering from war in the 70s. The economy was in a bad position and needed to be put in the right hands immediately. Reagan thought tax cuts and interest rates would fix the problem but many people argued that his actions benefited the rich.
ReplyDeleteIn january 28, 2009 President Obama got congress to sign a stimulus package which gives the nation 819 billion dollars for recovery from the recession. "all but 11 democrats voted for the plan and 177 republicans voted against it. The 244 to 188 vote came a day after Mr. Obama traveled to Capitol hill to seek republican backing, if not for the package then on other issues to come."(ny times) In the 1980s many people disagreed with what regan was doing for the economy and he didnt get much support as well as Obama. Hopefully Obamas package is more successful than reagans attempt to bail out the economy.
Miriam Correa
ReplyDelete