W. W. Norton & Company | We the People, 6th Edition

Chapter 16: Government and Economy

Does any president deserve the credit for an economic boom or recession? Who do you think is more important in influencing the economy, the president or the chairperson of the Federal Reserve Board? If our system is decentralized, how much influence can government policies have in directing the economy? How much influence does public opinion have on economic policy?

In 1996 Steve Forbes campaigned for the presidency on a flat-tax platform, which would eliminate a progressive income tax and establish instead a flat rate on all earned income; however, unearned income (dividends and interest payments) would not be taxed. Would this really be a “flat” tax or would it be regressive? Do you agree with this idea? What groups in our society would benefit most from this proposal?

The U.S. economy has been undergoing some major shifts away from high-paying manufacturing jobs to a split economy, in which high-tech jobs are paid very well but unskilled and semiskilled jobs are paid very little, and away from lifetime employment to the increasing use of consultants and temporaries and from guaranteed pension plans to Individual Retirement Accounts and 401(K) accounts. Have you thought about how these trends will affect your working life? How can you best prepare yourself to live in an uncertain economy?

If most of the federal budget is uncontrollable, then what would you have to do to significantly reduce the size of the government? Do you think any programs should be abolished? If so, which ones? Should any programs be expanded? If so, which ones?

Recently many people have argued that we should privatize much of government, that is, turn over to the private sector such traditional governmental programs as running prisons, Social Security, public broadcasting, and even public schools. Do you think this is a good idea? What programs might you propose be privatized? What disadvantages do you see in privatization?

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