Social Welfare and the Safety Net Article Review

individuals and families kept more of their income instead of having it taxed to support social programs, would this be prudent public policy? Explain your answer.

The answer to this question is 'it depends.' Many social programs orchestrated by the federal government are more efficient than what some individuals could provide for themselves such as education. Also, while some upper-middle class families might be able to better provide some of the social services provided by the government for themselves like access to recreational areas if they were taxed less, very poor people would not have sufficient income to do so. Of course, the very 'poorest of the poor' who are barely taxed at all because their incomes were so low would be hurt the worst by this policy, as they would lose the safety net that protects them.

Q2. Should there be an expectation for individuals to act in their own best interests economically? Explain your answer.

No. People often make irrational economic decisions such as taking on too much mortgage or credit card debt or assuming that a college education will automatically lead to a better-paying job. It is human nature to focus on the 'here and now' rather than upon the future: for example, someone may rationalize that buying a hamburger from McDonald's is cheaper than fixing a healthy meal at home without taking into consideration the long-term costs of the health consequences such a decision might have. People also have imperfect information and may be ignorant of economic concepts that affect their futures.Q3. Policy, withholding and the earned income tax are three tax policies that are central to U.S.. Explain one of the tax policies and provide an example.

The earned income tax credit is a tax refund for low and lower-middle income citizens based upon their level of income and number of children. This not only helps these consumers stay off welfare but also gives them more money to infuse into the economy, given that poorer people tend to spend rather than save any money they receive back from the government as a tax refund or credit.

Q4. Explain the industrial performance model.

The industrial performance model stresses the interests of manufacturing organizations and the production of goods and services as an engine of economic development in contrast to the increasingly service-based nature of the modern economy.….....