1: American Government

1. American National Government and Representative Democracy

Government = organized group of persons with authority/responsibility to direct and supervise public affairs
* Needed for civilized society
US tends to want private, voluntary action over gov action thru taxation
* Preamble to the Constitution – kinda broad, not v specific
Thomas Hobbes – english philosopher, gov ruled by kind with no accountability to anyone else is better to a state of nature where life would be “solitary, poor”
* Scared of social contract theory → married contract to authoritarianism

Rules → made to coordinate actions for mutual benefit in conflicts
  * Enumerated powers – explicitly set powers in Constitution (see article I sec 8)
  * ex) coin money, fix standard of weights and measures
  * Establishment of some mechanism for peaceful solution to disputes

Public goods:
  * difficult/impossible to exclude someone from consuming/enjoying them
  * Consumption is nonrivalrous (one person consuming doesn’t reduce supply for others)
    * Private actors will undersupply public goods bc no one to cover cost
Function of gov includes to “provide for common defense” against invasion or threats
* Categorized as “pure public good”
* Protecting me doesn’t take away your protection
National defense counterpart → public safety (police, fire dept)
* Can be kinda rivalrous
* Private sector to supplement
Education is also public good (could be private tho but all states made education free)

Market failure – private competition causes manipulation in prices
Market power – when single seller or buyer has ability to manipulate prices to their advantage
* Justification for gov action as antitrust laws
Antitrust laws – law that encourages competition by limiting ability of firms to achieve and exploit market power
* Constantly changing law bc can’t decide how much power is too much, if market power is actually bad, how to solve
* Focus more on merging companies now
Market failure also includes negative externalities – producing good or service puts costs on other ppl, not buyer or seller
* ex) pollution → price paid for cost of labor but not damage done by waste… to enviro
* Environmental Protection Agency imp in fed gov – sustainable level of consumption management
Economic theory: consumers in competitive markets are fully informed abt products and services they’re buying
* Kinda false
* Can manipulate or withhold info

Gov must promote general welfare
* Gov wasn’t responsible for unemployment, inflation, economy until great depression 1930s
Pre-depression – gov would protect or subsidize some industries or building infrastructure for economic prosperity
  * Successful (interstate highway)
  * Also failed (Smoot-Hawley tariff bill)
  * Controversial but gov can help individ firms thru bailouts, subsidies

Gov requires some purchase of private insurance (car…)
Social security – mandatory retirement insurance
  * Ppl pay payroll taxes while they work → get cash payments at age 62
  * 20% of gov spending now
  * Not sustainable bc of longer life spans, demographic projections
Disaster relief:
* Funded thru general tax revenues but ppl expect Fed Emergency Management Agency to help

Idea that gov should redistribute resources from taxpayers to deserving recipients
  * Medicaid, Temp Assistance to Needy Fams, Earned Income Tax Credit
  * Pro: rich society should provide min standard of living
  * Con: corruption, disincentives ppl to help themselves
Redistribution can also go to interest groups
* Agricultural price supports – made during Depression, now given to large agri corps that are fine financially
* Income tax deduction for charity

ex) motorcycle helmet law, owning marijuana
“Undesirable” includes discrimination
  * Jim Crow laws – neutral on face but discriminated against Black ppl
    * Still affects us now
  * Immigration laws based on national origin
  * No discriminating bc of race, sex..on jobs by law
Discouraging actions = encouraging other preferences
* ex) income tax deduction for charitable contributions made to support someone’s vision of general welfare
* Tax deduction for interest on mortgage → incentive to buy house not rent
Controversial to define and promote common values
Religion:
* Using Christian tradition as base for law → violation of First Amendment
Protective model of democracy:
* Democracy promotes equality and protects individs from overbearing power of state
Developmental model:
* Democracy enables/encourages individs to have “civic virtue” and pursue better life thru participation in collective action
National defense spending fell from 62% to 15.4%
Increase in spending on social insurance and redistribution
* International is still smallest spending