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
Order
Unite
Provide
Protect
Freedom
Justice
vs Securing Liberty
Authority
Order
Unite
Provide
Protect
Freedom
Justice
vs
Securing Liberty
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
Hare
1, 0
1, 1
Hunter 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.
For each political cartoon
1. Answer the questions
2. 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
0
25
50
75
100
Economic Purposes of Government