Moreover resources are more diverted to high income consumers leading to misallocation of resources. Policies for an equitable distribution by government usually conflict with the goals of more efficient economy as it is likely to inhibit the efficient operation of price system. Equitable income distribution is also likely to discourage people to work at their best capabilities leading to
It is highly likely that there will be disincentive effect, discouraging the workers from working hard (Economics Help). Since the workers are aware of the fact that a huge proportion of their income will be taken away anyway, there will be less incentive for them to work hard. Also, such progressive tax can discourage the poor from struggling to climb the ladder. The mere fact that they will be provided with insurance and protection from the government will eliminate the need to get out of their current status. Nonetheless, other economists argue that the disincentive effect is highly unlikely to occur.
For example, Keynesian economics counters the idea that lower wages can restore full employment. They are arguing that employers will not add employees to produce goods that cannot be sold because demand is low. Similarly, poor business conditions may cause companies to lower their capital investment, instead of taking advantage of lower prices to invest in new technology or capital. This would also have the effect of reducing overall employment. Keynesian economics is generally what we use today in our economy with some exceptions A person who believe in Keynesian economics is usually a democrat who believe government intervention is necessary for our country and our economy alone.
Whether to impose sugar tax is an interesting economic debate, while the taxing sugary beverages have its pros and cons, it also may create some problems for the state legislatures and other government bodies. Sugar tax will result in increasing the prices of products which hurt the low income group because low income people spend much higher portion of their income on the related products. The sugar tax may have a very marginal impact on reducing consumption and will encourage the people to switching to alternatives (e.g. switching to cheaper products or switching to other high calorie alternatives, like fruit juice) which may not provide the benefits state intends because it will not result in a great reduction of the people’s calorie
It can draw and execute development policy without the objection from the citizens and policy can be more public interest oriented. Although some scholar viewed that authoritarian regime will over-intervene the economy and open market economy cannot be practised. In fact, suitable government intervention is necessary to economy, especially in the early stage of economic development. Besides, some may also think that authoritarian regime lack monitor from citizens that may cause corruption this worsen economic development. As mentioned in the essay, most authoritarian regime have strong mechanism and penalty in monitoring the discipline and corruption that will not cause bad impacts in economic
Another major risk that Macy’s encounter is the impact of company’s revenue and operating results that are depending on economic, political condition, and other developments. Assuming that federal open market committee decided to stabilized economic growth because of the unfavorable economic by controlling money supply, which can affect customers spending. The company cannot control government decision over developing economic
In many cases, whether protectionism or free trading has long been a question for the economy. Clearly, there can't be a correct answer applicable to all different situations. Further, the difference in growth an economic development between different states call for adoption of innovative ideas based on economic performance rather than the trending international policies and campaign for the adoption of free-market policies. As a result, protectionist fits well in a conservative environment in a move to establish economic stability, minimize the number of external factors affecting the local businesses, and limit competition exposed to infant industries. Protectionist economies enjoy improved chances of employment as there is a reduced transfer of labor out or into the country.
It can slow down the economy. The U.S. economy is heavily reliant on consumerism. However, the Fair Tax Act will discourage people from spending more, and this is not good for a capitalist economy. 3.
The above as quoted from his speech emphasizes on the importance of economic rights, as he simply puts it, “freedom cannot exist without economic security”. Some renowned scholars have argued otherwise, while others argue that state intervention only hinders the right of free market; therefore the state should not interfere with these rights (ÇAMUR). It is no surprise however that in developing countries, economic and social rights are regarded more important, and consider political and civil rights as an obstruct to achieve economic development (ÇAMUR). This argument has been countered however, some scholars have pointed out that dictators in developing countries argue that these rights aren’t important because of their interests (Tharoor). Regardless, the needy will always prefer their social and economic rights to be protected by the government before political civil rights (ÇAMUR).
The three main debates include pooling/ socialization of risk, the presumed conflict between equality and efficiency, and whether the existence of the welfare state stimulates of shows the economy. For efficiency and equality the conflict is what the outcome of the economy will be. The concern is that the market system will damage and crumble if more social programs that give to the poor are created, because it will lead to higher taxes and stricter regulations. Production will be cost effective, therefore producing fewer
The reasoning behind this is simply a matter of economics and resources a state has at hand. In order to be generous one must have excess resources to give away and eventually a state will be depleted of excess. To maintain the generous reputation a ruler would have to raise excessive taxes or else face backlash from the people for withdrawing generosity. Machiavelli would likely be at odds with the welfare-state because people are given generous financial support with the burden being returned to the people through high taxation. It is better to be an ungenerous ruler because they will be able to conduct the affairs of state without excessive taxation.
In a capitalist environment, at least where corporations have been concerned, the government should neither intervene or regulate the open market. In fact, the essence of the capitalist economic system is to create an environment where the free market would be able to dictate itself. Regardless of the system’s original intentions, there have been cases globally and throughout time where government intervention has been necessary — cases where the general public itself has been affected negatively by corporate abuse of the market. For instance, the United States’ public-corporate relationship throughout the late nineteenth century and early twentieth century. Throughout this period, which was known as the Progressive Era, industrial America