Archive | Economics

Thought Talk: What are the responsibilities of a consumer in a free-market economy?

A free-market economy is an economy that is regulated solely by its participants. In its purest form, buyers and sellers do not coerce each other, and instead engage in trade without any kind of third party regulation.  Their dealings are based on the belief that both the producer and the consumer is getting the best deal.  In addition, the government does not play an active role in promoting or suppressing the economic activities of its citizens.   While a controlled market (the opposite of a free market) would place tariffs on foreign goods and restrict other aspects of the economy, a free market economy operates laissez-faire style. Would buying goods produced in one’s own country support a free market economy by preventing the necessity of tariffs, or is it counter-productive to a free-market economy because it goes against the principles of it? What are the necessary steps a consumer must take to allow a free market economy to work?


Posted in Economics, Philosophical2 Comments

Resolved, that unemployment compensation merely subsidizes joblessness.

Unemployment compensation consists of payments by state governments to out-of-work Americans who are eligible to receive such aid.  The amount of aid given is assessed by comparing the worker’s wages and length of time at the previous employer.  As more and more businesses shell out money to pay for these compensation programs, many people wonder whether the government is being too cushy with the unemployed.  After all, these people receive a check in the mail for nothing except the fact that they are out of a job.  But, then again, with an unemployment rate of nearly 9%, it is insensitive to say that certain people are avoiding finding a job simply because it’s easier to get the check in the mail.  There are plenty of Americans that are jobless simply because there are no jobs, and therefore rely on their unemployment compensation.  Shouldn’t we, after all, help the average Americans that are struggling in the broken economy to find a job through unemployment compensation?


Posted in Economics0 Comments

Resolved, that all of the “Bush tax cuts” be extended until 2013.

The Tax Relief Reconciliation Act, passed in 2001 and extended in 2003, lowered income tax rates for the highest bracket of earners in the United States.  Known as the “Bush tax cuts,” these modifications to the income tax bracket have generated tremendous controversy over the past several years.  Proponents of extending the “Bush tax cuts” further, until 2013, argue that increasing income taxes of the nation’s highest earners would hinder the economic growth and recovery needed in the United States.  Supporters of the tax cuts also point to the adverse increased taxes have on job creation, noting that higher income taxes discourage entrepreneurship which in turn hinders job creation and growth.  However, detractors argue that the tax cuts have failed to stimulate economic growth and have instead aggravated budgetary problems.  Rather than improve the economy, critics argue that the “Bush tax cuts” have helped increase the budget deficit to record levels.  Others argue that the tax cuts have shifted the tax burden from the rich to the middle and working classes, exacerbating the problem of income inequality in the United States and hurting those who have been hit hardest by the recession.  Should the “Bush tax cuts” be extended until 2013 in order to improve economic conditions, or will extension hinder recovery?  Are tax cuts a reasonable way to stimulate growth?


Posted in Economics1 Comment

Thought Talk: What would it mean for the global free market if authoritarian China became the largest economy?

China is the world’s second largest economy, behind the United States, and is the largest growing economy in the world.  Its status in terms of trading, exporting, and importing makes it one of the most important markets worldwide.  But China is still officially a communist country, with, on paper at least, a government-run economy.  As China bursts onto the world stage, many people wonder whether the world’s largest economy is safe in the hands of a country that routinely pollutes, violates human rights, and remains hostile to the tenets of democracy.  How would the global economy change if China’s headstrong and ambitious government became the new heavyweight?  What impacts would this emergence have on diplomacy and global security?


Posted in Economics, International Affairs2 Comments

Resolved, that corporate activism is a misguided attempt at achieving social justice.

In the years since the rise of the alter-globalization movement, advocacy groups and political organizations have pushed for greater corporate responsibility worldwide.  The efforts of human rights groups to render corporations more responsible for their actions engendered not a new wave of ethical business, but a trend of corporate activism.  The efforts taken by a company to demonstrate social responsibility, termed corporate activism, have been criticized from both the left and the right.  Economists, such as Robert Reich, argue that corporations’ embracement of “social responsibility has dulled the public’s sense that there exist troublesome issues deserving of public attention.”  Many, like Reich, argue that corporate activism obfuscates the real problems caused by the corporations, thus preventing citizens from understanding the true nature of such problems. Corporate activism allows corporations to pat themselves on the back for doing a good job when in reality, they have done very little.  Others argue that though ideally a nice concept, corporate activism is an unnatural act for a company.  Concerned solely about profit and their bottom line, corporations, they argue, are ill-suited to be socially or morally responsible.  However, others contend that corporate activism is an important and effective way to achieve social justice.  Regardless of motive, some note, the fact is that corporate activism can alter lamentable situations, be they ones that endanger workers or ones that affect consumers adversely. Proponents of corporate activism argue that in many cases, it has achieved laudatory goals, such as the encouragement of healthy eating and lifestyles (the food industry) and the promotion of online safety (News Corp., Fox News’ parent company). Is corporate activism an effective way to allow market driven social change?  Is corporate activism an important or even necessary part of a corporations public outreach? Can corporations even be trusted to attempt to achieve social justice when their legal mandate is solely profit-maximization?


Posted in Economics, Philosophical1 Comment

Society Through the Eyes of Ben Bernanke and Ron Paul: Resolved, that the 2009 American Recovery and Reinvestment Act saved the economy from depression.

The American Recovery and Reinvestment Act was enacted in the first month of President Obama’s term to jumpstart our faltering economy, create and save 3.5 million jobs, give 95% of American workers a tax cut, and begin to rebuild America’s road, rail, and water infrastructure.  Though the crisis obviously was the result of the Bush era, not one Republican in the House and only three Republicans in Senate voted for the rescue bill. It cost $787 billion. Critics say it only served to drive us further into debt, while proponents claim it was a necessary measure that rescued our economy from certain depression.  Would our economy be for the worse or for the better without the American Recovery and Reinvestment Act?


Posted in Economics, Historical0 Comments

Resolved, that all taxes on food be eliminated.

In various states throughout the nation, there exist sales taxes on different kinds of food. Some states, like Arkansas, tax unprepared food and groceries, while Georgia levies a tax on almost all foods. Opponents argue that government oversteps its boundaries when it taxes food. They maintain that the government has no right to intervene, claiming that taxes on food are essentially a form of price control. They also note that because food is essential to survival, taxes on food are inherently regressive.  However, many advocate the use of taxes not only as a way to increase government revenue but also as a way to fight the national epidemic of obesity.  Supporters of food taxes claim an estimated $1.5 billion could be gained annually with even a 1-cent tax per 12-ounce soft drink. Does the government overstep its bounds when it interferes in the free market, even if it encourages healthier lifestyles?  Should all taxes on food be eliminated?

~KS APR ’11

Posted in Domestic Affairs, Economics2 Comments

Resolved, that Turkey should not have been granted membership to NATO.

After helping United Nations troops in the Korean conflict, Turkey was inducted into NATO in 1952. Turkey controls the straits between the Black Sea and the Mediterranean, and acts as an “eastern anchor” for NATO. Proponents of the decision to grant Turkey membership explain that it is only fair for Turkey to be added as a member of NATO, because they aided UN forces in the Korean conflict. They also believe that no harm will be done if Turkey stays as a member of NATO, as Turkey is already contributing a great deal. However, opponents argue that the only members of NATO should be the Allied Forces (UK, France, Russia, US, etc.) of World War II, and that Turkey only entered the war on the allied side at the end. So, should Turkey’s membership be taken away or do they have every right to stay?


Posted in Economics, International Affairs3 Comments

Resolved, that offshore drilling is vital to maintaining the U.S. economy.

Since 2003, the price of crude oil has increased throughout the world. Whether due to conflicts in the Middle East and Central America or price hikes on the behalf of oil-refiners themselves, the simple fact is that the U.S. is heavily dependent on foreign oil as a source of energy. In 2008, a moratorium on the ban on offshore drilling was lifted with hopes that doing so would decrease America’s reliance on foreign energy. In our current economic climate, many have argued for the increased expansion of offshore drilling, despite the recent disaster at Deepwater Horizon. Proponents argue that increasing domestic supplies will help buffer against volatile changes in the price of crude internationally. On the other hand, the Deepwater Horizon spill was the worst man-made disaster in the country’s history, impacting literally millions of Americans and their livelihoods. The complete impact of the oil-spill on the local economy has yet to be determined. Alternatively, the money invested in drilling could be used to explore or invest in green technology that would ultimately help achieve the longer term goal of energy independence while investing significant dollars into the economy.  So should we still engage in off-shore drilling?


Posted in Economics, Environment0 Comments

Resolved, that the United States cease its policy of imposing economic sanctions.

The United States and many nations around the world impose economic sanctions on other countries in an attempt to achieve specific foreign policy goals. Sanctions can come in many forms which can include, but are not limited to, tariffs, trade barriers, and import duties. Proponents of this resolution argue that economic sanctions induce trade wars between countries, and in the end provide very little benefit for the country imposing them. Moreover, in some instances, economic sanctions have actually back-fired and harmed the nation that originally imposed them in the first place. However, opponents assert that economic sanctions are a better alternative to the use of force when setting out foreign policy. Moreover, these sanctions can be an effective tool at protecting U.S. interests or ensuring the countries do not act in a counterproductive way to American interests, as is the case in Iran. No matter which way one looks at the issue, economic sanctions are the center of a very heated debate, especially in this time of very serious economic turmoil. Are sanctions a tool that the U.S. and other nations should continue to use or are they an ineffective method of achieving objectives?


Posted in Domestic Affairs, Economics2 Comments