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ECON305: Public Finance

Unit 6: Public Finance Trends and Debates in the United States   This unit applies the public finance concepts you have learned throughout the course to the example of the United States Government.  It begins by familiarizing you with some background information on the U.S. government's aggregate taxation and expenditure over the last 100 years.  You will learn that both taxes and expenditure have grown steadily over this period by taking a look at publicly-available measures of these taxes and expenditures and discussing the types of taxes and expenditures we should expect to find at different levels of government.  The unit will go on to review some of the major contemporary debates in US government spending and taxation, including: (i) the Bush tax cuts, (ii) the stimulus bill, and (iii)proposed constitutional limits on spending.

6.1 The Growth in Public Financing as Public Policy in the United States   6.1.1 Growth of Taxes and Expenditures   - Reading: Visualizing Economic’s “Tax Rates and Government Spending” Link: Visualizing Economic’s “Tax Rates and Government Spending” (HTML)
 
Instructions: Please read the entirety of the linked article.
 
Terms of Use: Please respect the copyright and terms of use displayed on the web pages above.

  • Web Media: Bankrupting America’s “VIDEO: Is Washington Bankrupting America?” Link:  Bankrupting America’s “VIDEO: Is Washington Bankrupting America?”

    Instructions: Please watch the entirety of the video (2:21).  While you are watching, ask yourself: “What might be the root of the increase in spending?”  Please use the data with caution, as the data on household income is controlling for inflation, while it is does not appear from the notes that the spending per household controls for inflation.
     
    Terms of Use: This work is licensed under a Creative Commons Attribution 3.0 United States License.  It is attributed to Bankrupting America.

6.1.2 US Taxation System   - Reading: EOEarth.org: Brian Roach’s “Taxation in the United States” Link: EOEarth.org: Brian Roach’s “Taxation in the United States” (PDF)
 
Instructions: Open the link to the reading above. Please read the article in its entirety.
 
Terms of Use: The article above is licensed under a Creative Commons Attribution-ShareAlike 2.5 Generic License.  The original version of this article can be found here.

6.1.3 The US Federal Budget   - Reading: Wikipedia’s “Government Spending” and “2010 United States Federal Budget” Link: Wikipedia’s “Government Spending” (PDF) and “2010 United States Federal Budget” (PDF)
 
Instructions: Please read both articles in their entirety.  To get a better look at the graphs and tables, click on them to enlarge.  Try to identify the most important parts of the Federal Budget.  How easy will it be to make cuts in these areas?  Do you think this type of spending is the result of rent seeking?
 
Terms of Use: The articles above are released under a Creative Commons Attribution-Share-Alike License 3.0.  You can find the original Wikipedia version of these articles here and here.

6.1.4 State Budgets: The Example of California   - Reading: Dave Johnson’s “How does California Develop the State’s Budget?” and California’s Legislative Analyst’s Office’s “Cal Facts 2006: State Budget” Link: Dave Johnson’s “How does California Develop the State’s Budget?” (PDF) and California’s Legislative Analyst’s Office’s “Cal Facts 2006: State Budget” (HTML)
 
Instructions: Please read both articles in their entirety.  Much of the country’s spending on social services and education are executed through individual state budgets.  As California is the most populous state in the US, it has one of the largest and most comprehensive budgets.  Although each state has its own process, these readings will illustrate some of the complexities of the state budgeting process.
 
Terms of Use: The Johnson article is licensed under a Creative Commons Attribution-NoDerivs-NonCommercial 1.0 Generic License.  An original version of the Johnson article as posted on Seeing the Forest can be found here

 Terms of Use: Regarding the Legal Analyst's Office's document,
please respect the copyright and terms of use displayed on the web
pages above.

6.2 Contemporary Issues   6.2.1 Bush Tax Credits: To Extend or Not to Extend   - Reading: Economics in Plain English’s “Obama versus the supply-siders – to extend the Bush tax cuts or not? That is the question…” Link: Economics in Plain English’s “Obama versus the supply-siders – to extend the Bush tax cuts or not? That is the question…” (PDF)
 
Instructions: Please open the link above to read the article in its entirety, and consider the discussion questions at the bottom of the page.
 
Terms of Use: The article above is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 United States License.  The original version of this article from Welker's Wikinomics can be found here.

6.2.2 The Stimulus Bill: American Recovery and Reinvestment Act of 2009   - Reading: Ron Paul’s “On More Stimulus Spending” and Dustin Ensinger’s “Stimulus Package has Created Jobs, Boosted Economy” Link: Ron Paul’s “On More Stimulus Spending” (PDF) and Dustin Ensinger’s “Stimulus Package has Created Jobs, Boosted Economy” (PDF)
 
Instructions:  Please read both articles in their entirety.  These readings take opposite viewpoints on the usefulness of stimulus spending in the most recent recession.  Which arguments appear to be the strongest?  Have you seen positive effects of the stimulus spending in your community?  Do these temporary measures warrant the additional government spending?  Is there a risk that temporary spending will become permanent? 
 
Terms of Use: The Paul article is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License

 Terms of Use: The article by Dustin Ensinger is licensed under a
[Creative Commons Attribution-ShareAlike 3.0 United States
License](http://creativecommons.org/licenses/by-sa/3.0/us/).  An
original version of Ensinger's article can be found
[here](http://www.economyincrisis.org/content/stimulus-package-has-created-jobs-boosted-economy).

6.2.3 Constitutional Limits on Taxes and Spending?   - Web Media: C-SPAN’s “The New Spending Limit Amendment.” Link: C-SPAN’s “The New Spending Limit Amendment” (YouTube)

 Instructions: Please watch the entire interview (4:21).  If you
would like further information, look up the op-ed they reference in
the Wall Street Journal. The following reading is a response to this
interview and OP-ED.  Consider which argument you find more
persuasive.  
    
 Terms of Use: The material above was produced by C-SPAN, with
permission granted for non-commercial use with no modifications to
the material.  The original version can be found
[her](http://www.youtube.com/watch?v=szE5WneZb18&feature=player_embedded)[e](http://www.youtube.com/watch?v=szE5WneZb18&feature=player_embedded).