What’s the theory? What’s the reality? The specifics of U.S. monetary and fiscal policy change...

Question

What’s the theory? What’s the reality?  The specifics of U.S. monetary and fiscal policy change constantly. But some of the debate about what monetary or fiscal policy is appropriate at a moment in time results from differences in political philosophy. Some people believe government intervention often can improve things—they have a “hands on” bias. Some people believe government intervention most often makes things worse—they have a “hands off” bias. Here are the web sites to four organizations, two at the “hands on” end of the spectrum and two at the “hands off” end. 
	
Document Preview: What’s the theory? What’s the reality?The specifics of U.S. monetary and fiscal policy change constantly. But some of the debate about what monetary or fiscal policy is appropriate at a moment in time results from differences in political philosophy. Some people believe government intervention often can improve things—they have a “hands on” bias. Some people believe government intervention most often makes things worse—they have a “hands off” bias. Here are the web sites to four organizations, two at the “hands on” end of the spectrum and two at the “hands off” end. For hands on go to United for a Fair Economy at  HYPERLINK "http://www.faireconomy.org/" http://www.faireconomy.org/ Or, the Economic Policy Institute at  HYPERLINK "http://www.epi.org/" http://www.epi.org/For hands off go to the Cato Institute at  HYPERLINK "http://www.cato.org/about/about.html" http://www.cato.org/about/about.htmlOr, the American Enterprise Institute at  HYPERLINK "http://www.aei.org/" http://www.aei.org/ Please visit the web sites and use them to answer the following questions:What is the rationale for a “hands on” perspective as stated in the “about” page of the first two web sites?Identify two policies that call for hands on intervention. (Go back to the home page for each organization to explore the policies they advocate.)What is the rationale for a “hands off” perspective as stated in the “about” page of the second two web sites?Identify two policies that call for hands off. (Go back to the home page for each organization to explore the policies they advocate.)Pick one policy from 2) and 4). In each case, how would the other side criticize the policies you have chosen?

David · Accepted Answer

Answers:
Question 1:     
 Following contains some reasons for people to believe in government intervention, that is, a 
“hands on” approach to improve things: 
 In order for a fair economy to exist, there has to be jobs that can provide dignity, fair pay and 
where the workers have democratic rights, which can only be assured by government in the 
form of laws. 
 There is a need for a robust public sector that works for the common good, are funded through 
progressive taxes and accountable to the people. 
 Government needs to ensure rights and equal opportunity for people marginalized due to 
myriad of reasons such as race, gender, etc. 
 The government has the responsibility to set standards and rules for sustainability and equity, 
where individuals do not accumulate excesses of wealth to the detriment of others or the 
planet and ensure the efficient provision of public goods and investments.. 
 Government policy on education, taxes, immigration, public investment, trade and 
globalization, etc. directly or indirectly influence jobs, economic growth, and the well-being of 
all Americans.
Question 2: 
a) THE U.S. FINANCIAL TRANSACTIONS TAX
The Financial Transactions Tax or FTT is a progressive tax on financial speculation. The 
proposed U.S. Financial Transactions Tax (FTT), commonly known as the “Robin Hood 
Tax,” seeks to raise billions of dollars in federal revenue by levying a small excise tax 
on certain transactions in the financial sector. Not only would the FTT raise significant 
revenue from a sector that can afford it, but it would also reduce speculative 
investment activity.  The tax would particularly target hedge funds and other large, 
institutional investors- particularly high-speed traders - rather than small individual 
investors. In addition, the proposed legislation stipulates that the revenue would be 
spent on job-creating infrastructure projects as well as social programs such as 
education. 
b) Little basis in Tax Cuts to Promote Growth
The basic idea is that shrinking the government’s share increases what people take 
home, encouraging workers to work more and investors to invest more. Even if lower 
taxes encouraged people to save and invest more, the huge government deficits 
created by the budget would crowd out private investors and offset some of those 
direct effects. Cutting the tax on investment income,

What’s the theory? What’s the reality? The specifics of U.S. monetary and fiscal policy change constantly. But some of the debate about what monetary or fiscal policy is appropriate at a moment in...

Solution

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment