Discussion 5: Economics

Now that you have been introduced to different economic systems in Chapter 17 and the government’s role in the economy in Chapter 18, watch the video “5 Reasons Income Inequality Has Become a Major Political Issue” about the growing wealth gap in the U.S. Answer the following questions in a post of at least 150 words:

What type of economic system does the U.S. have?
In what ways does the U.S. government intervene in the economy? Who benefits from government intervention?
According to the video, what economic changes have to lead to growing income inequality in the U.S.? In what ways do you feel the impact of income inequality in your own life?
Post Requirements:

Your answer must be written in one short, clear, and coherent paragraph (at least 150 original words), i.e. it DOES NOT include the questions, names, titles, and/or references. It also DOES NOT include meaningless filler statements.
Respond to at least two (2) classmates with substantive commentary that addresses their post.
Work must be original, so produce your own work! Your post may be checked for plagiarism.
Write clearly for ease of reading and understanding.
Make sure to pay attention to spelling and grammar.
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ANSWER

Discussion: Economics

Q1. What type of economic system does the U.S. have?

The U.S. is a mixed economy as it exhibits characteristics of socialism and capitalism. It is a mixed economy as it embraces freedom on capital use, but government intervention is allowed for the public’s good.

Q2. In what ways does the U.S. government intervene in the economy?

The government intervenes in markets to combat inequities. This is done through the regulation of taxes and subsidies. Government intervention is also essential as it promotes general economic fairness in markets. Government interventions are prevalent, especially in maximizing social welfare. This is done through breaking monopolies and the regulation of negative externalities.

Q3. Who benefits from government intervention?

Government interventions are there to provide basic security. The government must intervene to prevent unrest and uphold economic equality (Harwood, 2019). It also provides economic security for the sick and disabled and also the unemployed through the unemployment benefit. This leads to an increase in net economic welfare and ensures that people are not extremely poor.

Q4. According to the video, what economic changes have lead to growing income inequality in the U.S.?

The main income inequality contributors in the U.S include;

Technology- Technology has created opportunities for those with the skills and prepared to take advantage, but it has also left out those without the skills (Harwood, 2019). Jobs done by people without college degrees, such as clerical tasks, and routine manufacturing, are now filled by computer software, leaving the people without income.

Globalization- rising economies such as China are proving to be competition because the reduced trade barriers have had the Chinese workers take over, leaving out the American workers without the skills. This leaves the American workers without a source of income.

Q5. In what ways do you feel the impact of income inequality in your own life?

The decline of organized labor has led to fewer labor unions and the loss of power by laborers to bargain for higher wages. This has personally affected me because, as a minimum wage worker, it is hard to keep up with the bills and advance my education for better chances. The minimum wage has led to some people working more than three jobs to cater to their bills instead of increasing their wages. This particular factor affects many Americans who are trying to better their lives.

References

Harwood, J. (2019). Five reasons why income inequality has become a major political issue. https://www.cnbc.com/2019/06/05/5-reasons-income-inequality-has-become-a-major-political-issue.html