01Why Study Public Finance 课件(共38张PPT)- 《财政与金融》同步教学(人民大学·第五版)

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01Why Study Public Finance 课件(共38张PPT)- 《财政与金融》同步教学(人民大学·第五版)

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(共38张PPT)
Finance and Finance
1.1 The Four Questions of Public Finance
1.2 Why Study Public Finance Facts on Government in the United States and Around the World
1.3 Why Study Public Finance Now Policy Debates over Social Security, Health Care, and Education
1.4 Conclusion
Why Study Public Finance 1
Heather Luea and Dan Sacks
P R E P A R E D B Y
Introduction: The Affordable Care Act
1.1
On March 23, 2010, President Barack Obama signed into law the Patient Protection and Affordable Care Act, commonly known as the ACA.
Under the ACA, the government was projected to spend nearly $1 trillion on public health insurance and subsidies to private health insurance coverage between 2010 and 2019.
This spending would be offset by spending reductions on existing public insurance programs and new taxes on the medical sector and the wealthy.
As a result of the ACA, insurance companies can no longer discriminate against sick patients, and individuals who can afford health insurance must purchase it or pay a penalty.
In addition, dozens of new initiatives are being undertaken in an attempt to control runaway health care spending in the United States
Introduction: The Affordable Care Act
1.1
Despite its passage, the ACA continues to be debated ferociously in Congress, in the states, and in campaigns at all levels of government.
Supporters argue that the bill corrects failed insurance markets, reduces the economic burden on the uninsured, and moves to control health care costs in the long run.
Opponents of the legislation viewed the ACA as an unwarranted expansion of government power into the health care sector—and an enormous expansion of government spending at a time of record deficits.
The controversies over the proper role of the government in dealing with health care coverage and costs raise the fundamental questions addressed by the branch of economics known as public finance.
The Four Questions of Public Finance
1.1
Public finance: The study of the role of the government in the economy.
Four questions of public finance:
When should the government intervene in the economy
How might the government intervene
What is the effect of those interventions on economic outcomes
Why do governments choose to intervene in the way that they do
When Should the Government Intervene in the Economy
1.1
Economics generally presumes that markets deliver efficient outcomes, so why should government do anything
Primary motive for government intervention is therefore market failure.
Market failure: A problem that causes the market economy to deliver an outcome that does not maximize efficiency (discussed in Chapter 2).
1.1
Measles vaccine was introduced in 1963, and measles cases had become relatively rare in the United States by the 1980s.
1989 1991: Huge resurgence in measles.
This outbreak resulted from very low immunization rates among disadvantaged inner-city youths.
Unimmunized children imposed a negative externality on other children.
APPLICATION: Modern Measles Epidemic
The federal government responded to this health crisis in the early 1990s:
Encouraged parents to immunize their children.
Paid for the vaccines for low-income families.
Impressive results:
Immunization rates never higher than 70% prior to outbreak.
Rose to 90% by 1995.
Government intervention clearly reduced this negative externality, discussed in Chapters 5 and 6.
1.1
APPLICATION: Modern Measles Epidemic
In 2014, there were 644 cases.
Largest outbreak in Disneyland.
The reason was the refusal of a large number of parents to immunize their children due to now discredited “link” between vaccinations and autism.
The “anti-vaccine” movement has taken root, resulting in large pockets of nonimmunized children in some areas.
Does government policy need to go further and require children to be vaccinated
1.1
APPLICATION: Modern Measles Epidemic
When Should the Government Intervene in the Economy
1.1
Even if the market is well-functioning, an efficient outcome is not necessarily socially desirable.
Redistribution is a second reason for government intervention.
Redistribution: The shifting of resources from some groups in society to others.
1.1
Tax or Subsidize Private Sale or Purchase
Use the price mechanism, changing the price of a good to encourage or discourage use.
Taxes raise the price for private sales or purchases of goods that are overproduced.
Subsidies lower the price for private sales or purchases of goods that are underproduced.
How Might the Government Intervene
1.1
Restrict or Mandate Private Sale or Purchase
Quotas restrict private sale of goods that are overproduced.
Mandates require private purchase of goods that are underproduced.
Public Provision
The government can provide the good directly.
Public Financing of Private Provision
Governments pays; private companies produce.
How Might the Government Intervene
Interventions have direct and indirect effects.
Direct effects: The effects of government interventions that would be predicted if individuals did not change their behavior in response to their interventions.
With 49 million uninsured, providing universal health insurance covers 49 million people.
Indirect effects: The effects of government intervention that arise only because individuals change their behavior in response to the interventions.
If people drop private coverage, many more people may end up covered by the public plan.
1.1
What Are the Effects of Alternative Interventions
Governments do not always choose efficient or socially desirable outcomes.
Governments face enormous challenges in figuring out what the public wants and how to choose policies that match those wants.
Political economy: The theory of how the political process produces decisions that affect individuals and the economy, discussed in Chapter 9.
1.1
Why Do Governments Do What They Do
The government is a huge part of the economy:
Government spending represents a large sector of the economy, in the United States and around the world.
This spending is financed with taxes or with debt, and these affect every facet of the economy.
Many sectors of the economy are also directly affected by regulation.
1.2
Why Study Public Finance
The methods and results derived from empirical economics are central to the development of public policy at all levels of government.
The Congressional Budget Office (CBO) “scores” policy proposals by estimating their budget implications.
CBO scoring uses the theoretical and empirical tools of public finance.
CBO scores can determine the fate of legislation.
1.1
APPLICATION: The CBO: Government Scorekeepers
1.2
The Size and Growth of Government: Federal Spending as a Percent of GDP, 1930 2014
In 1930, the federal government’s activity accounted for only about 3.4% of GDP. From the 1950s through the present, the size of government has averaged around 20% of GDP, although it grows during recessions.
1.2
The Size and Growth of Government: Total Government Spending Across Developed Nations, 1960 2015
In 1960, the United States was squarely in line with the average of the OECD in terms of the government spending share of GDP. Government growth was much faster in other OECD nations in the 1960s and1970s. All have now surpassed the United States.
Decentralization
A key feature of governments is the degree of centralization across local and national government units.
Centralization: The extent to which spending is concentrated at higher (federal) levels or lower (state and local) levels.
In the United States, state and local spending is about one-third of total government spending.
1.2
Federal vs. State/Local Government Spending, 2014
1.2
The federal government provides the majority of government spending in the United States, but other government spending is quite large as well, amounting to roughly one-third of total government spending, and over 110% of GDP.
Spending, Taxes, Deficits, and Debts
1.2
Government spending and its inflows are tax revenues.
If revenues exceed spending, there is a budget surplus.
If revenues fall short of spending, there is a budget deficit.
Each dollar of government deficit adds to the stock of government debt. That is, the deficit measures the year-to-year shortfall of revenues relative to spending.
The debt measures the accumulation of past deficits over time.
This government debt must be financed by borrowing from either citizens of one’s own local or national area, or by borrowing from citizens of other areas or other nations.
Spending, Taxes, Deficits, and Debts: Federal Revenues and Expenditures, 1930 2014
1.2
With the exception of an enormous increase in spending unmatched by increased taxation during World War II (1941–1945), the federal government’s budget was close to balanced until the late 1960s.
Spending, Taxes, Deficits, and Debts: Federal Surplus/Deficit, 1930 2014
1.2
From the mid-1970s through the mid-1990s, there was a relatively large deficit, which shrank dramatically in the 1990s. The United States was back in deficit by the early twenty-first century, with the deficit becoming very large in the late 2000s.
Spending, Taxes, Deficits, and Debts: Federal Debt, 1930 2014
1.2
The stock of debt rose sharply in World War II, then fell steadily until large deficits caused it to rise in the 1980s. The debt has risen considerably since, with a brief pause in the mid- to late-1990s, and now is over 103% of GDP.
1.2
Spending, Taxes, Deficits, and Debts: Debt Level of OECD Nations in 2014
The United States has higher debt levels than most other comparable nations, but its load remains well below others.
1.2
Spending, Taxes, Deficits, and Debts: State and Local Government Receipts, Expenditures, and Surplus, 1947 2014
Unlike the federal government, state and local government’s budgets are typically in surplus: there is very little deficit overall across the state and local governments in any year.
Distribution of Spending
Public goods: Goods for which the investment of any one individual benefits everyone in a larger group, discussed in Chapter 9.
Example: Defense spending
Social insurance programs: Government provision of insurance against adverse events to address failures in the private insurance market, discussed in Chapter 13.
Example: Health insurance
Over time, spending has shifted dramatically toward social insurance, especially health insurance.
1.2
Distribution of Federal Spending, 1960 and 2014
1.2
In 1960, nearly half of federal government spending was on national defense. Today, however, defense spending has fallen to less than one-fifth of the federal budget. The Social Security program is the single largest government program in the United States today.
Distribution of State/Local Spending, 1960 and 2014
1.2
Education, welfare, and public safety for almost 40% of state and local government spending. The major development has been the parallel growth in health care spending and the reduction in education spending.
Distribution of Revenue Sources
Individual income tax: A tax levied on the income of U.S. residents.
Corporate tax revenues: The funds raised by taxing the incomes of businesses in the United States.
Payroll taxes: The taxes on worker earnings that fund social insurance programs.
The major shift over time at the federal level has been the rapid shrinking of corporate tax revenues. The decrease in revenue from these taxes has been largely replaced by the growth of revenue from payroll taxes.
1.2
1.2
Distribution of Federal Revenue Sources, 1960 and 2014
Corporate tax revenues once provided almost 25% of federal government revenue, they now provide only about 15%. Payroll taxes have grown from a sixth of federal revenues to well over a third.
1.2
Distribution of State/Local Revenue Sources, 1960 and 2014
Over the past 40 years, the substantial drop in revenue from property taxes has been made up by rising federal grants and income taxes.
Regulatory Role of the Government
The government regulates a wide range of economic and social activities:
The Food and Drug Administration (FDA): food, cosmetics, drugs, and medical devices.
The Occupational Safety and Health Administration (OSHA): workplace safety.
The Federal Communications Commission (FCC): radio, television, wire, satellite, and cable.
The Environmental Protection Agency (EPA): pollution of air, water, and food supplies.
1.2
Many heated policy debates concern the impact of major public programs:
The role of Social Security, health care, and education are all contentious subjects.
“Liberal” and “Conservative” positions hold differing views on how to approach these major policy issues.
Why Study Public Finance Now Policy Debates over
Social Security, Health Care, and Education
1.3
Social Security is the single largest government expenditure program.
The financing structure of this program is basically that today’s young workers pay the retirement benefits of today’s old.
As the population ages, it is increasingly difficult to fund.
Liberals argue that we should raise necessary resources through higher payroll taxes.
Conservatives argue that, rather than transfer from young to old, we should encourage people to save.
Why Study Public Finance Now Social Security
1.3
By 2010, about 50 million Americans lacked any health insurance, about 18% of the non-elderly U.S. population.
The Affordable Care Act (ACA) expanded the government’s role by increasing regulation of insurance markets, mandating insurance coverage, and introducing large new subsidies for the purchase of health insurance, discussed in Chapter 16.
Supporters argue that the ACA corrects serious market in the insurance market.
Opponents charge that it represents an enormous, expensive, unwarranted expansion of government power.
Why Study Public Finance Now Health Care
1.3
There is an enormous dissatisfaction with our current educational system.
In 2012, the United States ranked 17th in reading, 20th in science, and 27th in math skills in a study of 65 countries.
Will more spending improve educational outcomes
Or might competition among schools help
1.3
Why Study Public Finance Now Education
Government plays a central role in the lives of all Americans.
There is ongoing disagreement about whether that role should expand, stay the same, or contract.
The facts and arguments raised in this chapter provide a backdrop for thinking about the set of public finance issues that we explore in the remainder of this book.
1.4
Conclusion

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