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Socratic Seminar

Socratic Seminar. Seminar Guidelines: 150 points Grade based on performance and preparation Bring Notes & Come Prepared Each student must have notes—have data for support Notes will be collected If absent during seminar: 3-4 Paper will be the “make-up” assignment. Question # 1.

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Socratic Seminar

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  1. Socratic Seminar • Seminar Guidelines: • 150 points • Grade based on performance and preparation • Bring Notes & Come Prepared • Each student must have notes—have data for support • Notes will be collected • If absent during seminar: • 3-4 Paper will be the “make-up” assignment

  2. Question #1 . 1) Discuss whether President Obama should Make the income tax more progressive Benefits Costs/Risks

  3. Why Raise Taxes? 1) To lower deficit-- 2) Redistribute Income => Rich to Poor 3) To increase Gov’t spending

  4. Raising Taxes on the “Rich”?

  5. The Laffer Curve Potential Impact of Tax increase: An ↑ tax rate => ↑ tax revenues or An ↑ tax rate => ↓tax revenues Tax

  6. GDP GDP ↓ Tax Rates increase too much When are Tax Rates too high? Tax Revenue ↓

  7. #1 Analysis . 1) Discuss whether President Obama should Make the income tax more progressive Benefits Costs/Risks

  8. Question #2 . 1) Discuss some possible solutions to increase the current rate of GDP growth. Benefits Costs/Risks

  9. GDP GDP GDP What creates real economic growth?

  10. #2 Ideas? . 1) Discuss some possible solutions to increase the current rate of GDP growth. Ideas Costs/Risks

  11. Question #3 . 3) Discuss some long term solutions to the Federal Government’s rising national debt. Solutions Risk

  12. Growth of Entitlements 1964 1984 2004* 19% 9% Social Security Medicare & Medicaid Defense All other spending Net interest *Current services estimate. Source: Budget of the United States Government, FY 2005, Office of Management and Budget.

  13. A Demographic “Perfect Storm”

  14. Growth of Entitlements 2011 Entitlement Spending & Interest on Debt 50% of Gov’t Budget 2040? Entitlement Spending & Interest on Debt Over 70% of Gov’t Budget Rep. Ryan versus President Obama proposed changes

  15. #3 Analysis . 3) Discuss some long term solutions to the Federal Government’s rising national debt. Solutions Risk

  16. Question #4 . 3) Discuss whether the Federal Reserve should keep interest rates at zero

  17. Who “wins” with zero percent interest rates? 5.25% 0.0%

  18. Money not Wealth • An increase in money supply does not lead to more wealth Wealth Unchanged MS

  19. Keynes vs. HayekPart 2 Animal Spirits versus Malinvestment • http://www.youtube.com/watch?v=GTQnarzmTOc

  20. Friedrich Hayek • Economist from School of Austrian Economics • Believed in: • Free Markets, • Limited central bank action • artificially low interest rates lead to Malinvestment Friedrich Hayek 1899 - 1992

  21. Quantitative Easing • What is quantitative easing—link below • http://en.wikipedia.org/wiki/Quantitative_easing

  22. Interest Rate MS1 MS2 Affects AD i1 --------- i2 ------------------ MD Qty of $ Economic Situation GDP growth = -1.0%, Unemployment = 10.0% Little to no inflation Solution: Loose Monetary Policy

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