Effects of Government Policies

Costs and Benefits

Minimum Wage Laws

Benefits (+)• Protects uneducated

workers• Protects young

workers• Redistributes wealth

of business

Costs (-)• Creates big

government– Government is

involved in the daily lives of its citizens

• Capitalism was built on the idea that government would not be involved in the business world

Anti-trust LawsCosts (-)

• Creates big government– Government is involved in

the daily lives of its citizens

• Too many regulations cost businesses a lot of money– $1 trillion annually

• Capitalism was built on the idea that government would not be involved in the business world

Benefits (+)• Break up monopolies• Allows for more

competition• Holds business owners

responsible for wrong-doings

• Promotes fair business practices– If not, taken to court

• Helps unions

Think: Clayton Antitrust Act, Sherman Act, Muckraking, The Jungle

EPA Regulations

Costs (-)• Creates big

government– Government is

involved in the daily lives of its citizens

• Government deficits cost future tax payers

• Cost passed on to consumer

Benefits (+)• Protects consumers• Protects environment• Set rules and

regulations for businesses

• Can fine businesses• Encourages eco-

friendly alternatives

Social Security

Costs (-)• Creates big

government– Government is

involved in the daily lives of its citizens

• Government deficits cost future tax payers

• Will it be there when you need it????

Benefits (+)• Provides monthly

income to retired workers, spouses, disabled, and orphans

• Money collected from both workers and businesses through a tax

Farm SubsidiesCosts (-)

• Creates big government– Government is

involved in the daily lives of its citizens

• Government deficits cost future tax payers

• AAA during Great Depression– Farmers killed

livestock to get subsidy money

Benefits (+)• Protects environment

through conservation– CRP ground

• Provides money to farmers during bad crop years

• Encourages farmers to limit supply of crops so prices are good

International Sanctions on Agriculture

Costs (-)• Hurts trade relations• Prices of goods

change– Importing country:

• Shortage of crop, price increases

– Exporting country:• surplus crop, price

drops

Benefits (+)• Increases safety of

food for consumers– Importing country

• Encourages better farming practices– Exporting country

MedicareCosts (-)

• Creates big government– Government is

involved in the daily lives of its citizens

• Government deficits cost future tax payers

• Will it be there when you need it????

• How good is the medical coverage???

Benefits (+)• Provides medical and

hospital care for people 65 and older

• Money collected by worker and business through a tax

Unemployment Insurance

Costs (-)• Creates big

government– Government is

involved in the daily lives of its citizens

• Government deficits cost future tax payers

Benefits (+)• Provides monetary

relief while the person is without a job

• Provides help in finding them another job

Think: Great Depression time period

Corporate Tax Credits

Costs (-)• Some businesses pay

taxes twice (called double taxation)– On their earnings– On shareholder

dividends– On personal wages

Benefits (+)• Provides money to

government– Businesses are taxed

Think: big business, robber barons, progressives

Public Works Projects

Costs (-)• Big government

– Government is involved in the daily life of its citizens

• Government deficits cost future tax payers

Benefits (+)• Puts unemployed

people back to work• Beautifies cities• Improves roads,

buildings, hospitals, schools

Think: Great Depression time period; New Deal Projects

U.S. GovernmentReceipts and Expenditures

• http://encarta.msn.com/media_461544509/U_S_Federal_Receipts_and_Outlays.html

• What conclusions can you draw about the U.S. treasury?