Creating Social Policy Social policy primarily refers to

Creating Social Policy

Social policy primarily refers to guidelines, principles, legislation and activities that affect the living conditions conducive to human welfare.

All policy, tax, regulations, laws, etc. serve as incentives to change behavior.

The are no “right” or “wrong” solutions, there are only trade-offs. - Harold Winter Economist shouldn’t solve problems or create them. They should only define the problem.

For Core 2 you will be acting as a Social Planner Determine the Problem How is this issue hurting society? What were some of the alternative solutions that you have researched? In the name of the “General Welfare” what would a socially optimal situation look like? (Goal) Using your knowledge of the governmental process, economics, history and social mores and norms create a social policy that is intended to promote the General Welfare. (Method and Implementation) How are you changing incentive?

Acting as an Economist The job of an economist is not to create problems or to solve problems. The job of an economist is to define problems. This definition comes from a careful breakdown of marginal costs and marginal benefits. First you will need to clearly outline the costs and benefits of the alternative plans that you have researched. Secondly, you will need to develop a comprehensive list of the probable marginal costs and marginal benefits of your plan. In short you need to outline the trade-off of your plan.

We have been studying how the government creates economic policy that is intended to have a desired effect on the economy. Now you will look at your own topic.

How healthy is the U. S. economy? Economically are we currently in a good place?

How important is your topic and how is the general welfare being adversely impacted? How “healthy” are we with regards to your topic? Are we currently in a good place?

How should the U. S. Government carry out its economic roles?

What role should the U. S. government have with regards to your topic and how should it carry out that role?

1. Government actions will affect you topic. What are the costs and benefits? Remember the seen and unseen.

2. What actions have governments taken thus far? What have been the overall outcomes?

3. How is your topic impacting standards of living?

People will respond predictably to incentives.

Shifts in Total Demand Total Supply

Supply and Demand Shifts in Demand- besides current price changes what other factors shift demand? (Lower to the left- Rise to the right) When there is an increase in Quantity demand When there is an decrease in Quantity demand Price increases (direct) Price decreases (direct) Price (P) Supply (S) P 1 $5 P e Equilibrium (Qs= Qd) P 1 (D) 5 Demand Shifters Q e Q 1 (D 1) Quantity (Q) (D 1) Q 1 (D) Quantity (Q) Q e 1. Change in Taste (Direct) 2. Change in income- normal products- direct, inferior products- inverse 3. Change in market size (number of consumers) - direct 4. Expectations of consumers (future price, future availability, future income) 5. Price of related goods (substitutes – direct, complements- inverse) Shifter PPT TC

Shifts in Supply- Supply and Demand besides current price changes what other factors shift supply? (lower to the left, rise to the right) When there is an increase in Quantity supplied When there is an decrease in Quantity supplied Price decreases Price increase Price (P) (S 1) Supply (S) P 1 $5 P e Equilibrium (Qs= Qd) P 1 (D) Q e Q 1 Quantity (Q) 7 Supply Shifters 1. Resource Cost (wages and raw materials)- inverse 2. Alternative output price change - inverse 3. Technological improvements 4. Number of Suppliers - direct 5. Producer expectations about future- inverse 6. Subsidies – government gives money to produce - direct 7. Taxes- inverse (D) Q 1 Quantity (Q) Q e Shifter PPT TC

Note: It may be confusing to think of everything in price and supply and demand It may be more practical to think in terms of utility (satisfaction) and marginal cost and marginal benefits. Remember Utility maximization- Marginal Cost = Marginal Benefits MB= MC stop MB > MC keep going MB < MC you went far MB= relates to demand MC is the supply utility You can shift cost and benefits just like supply and demand MC MB Quantity

Title Background of issue or problem Economic Rationale Incentives Economic Rationale Techniques Goal Proposed Solution Implementatio n of Plan Method of Testing solution Predictions Government Power and Ind. Rights Government process Game theory Economic Rational Trade-offs Data, Graphics, photos, propaganda, charts, graphs

On the trifold You may create QR codes that will link to youtube videos (speeches, information, economist), websites, political speeches, your own website, copies of bills, media, etc. There should be examples of propaganda Make your board visually pleasing and informative. In addition to the trifold 3 to 4 minute presentation that outlines the problem and your proposed solution 1 st page

Background Slide Briefly describe the issue. Why is this an issue today? How does this impact all people in society? Feel free to use information from core 1 This is also a good place to include data, graphs, facts and figures QR codes for background, data, and youtube videos 1 st page

Economic Rationale Changing Incentives How will your policy change incentives? 1. Who? What part of the population will your policy target? Why? 2. What incentives need to be changed? This is also a good place to include data, graphs, facts and figures QR codes for background, data, and youtube videos 1 st page

Economic Rationale Techniques What economic tools will you use to change incentives? Your plan should incorporate some of the tools below. Supply side shifters Tax or fines Price Controls, Floors or Ceilings Promoting free trade? Hands off and free market principles Competition Price Demand side shifters Subsidies or rebates Changing risks? i. e. bailouts Regulations Self Interest Game theory This is also a good place to include data, graphs, facts and figures QR codes for background, data, and youtube videos 1 st page

Economic Rationale Trade-offs - make a list of perceived benefits and costs to your policy. Don’t for to consider unseen costs!!! (chart form works best) Benefits Costs (Seen and unseen) you may speak with other people to help you with unseen. This is also a good place to include data, graphs, facts and figures QR codes for background, data, and youtube videos 1 st page

Government Power Vs Rights Government Power A. Where does the power of your plan originate? Specifically what part of the Constitution gives you this power? Is the power expressed or implied (Necessary and Proper Clause). Individual Rights Defend your plan and convince the reader that it does not violate any part of the Constitution, including Amendments 9 and 10. This is also a good place to include data, graphs, facts and figures QR codes for background, data, and youtube videos 1 st page

Government Process What Process of Government would you use? i. e. the Legislative Process, the executive process, the courts, or the states This is also a good place to include data, graphs, facts and figures QR codes for background, data, and youtube videos 1 st page

Game Theory Determine if there is a game theory connection to your topic Common Game theory concepts Prisoner’s dilemma Repeating games Stag hunt Chicken Trust game Battle of the sexes Free riding Tragedy if the commons Trade game (ultimatum game) Pareto improvement 1 st mover dilemma (entrepreneur's dilemma) Hold out problems Nash Equilibrium Dominate strategies This is also a good place to include data, graphs, facts and figures QR codes for background, data, and youtube videos 1 st page

Goal: 1. With regard to your topic, what is an acceptable goal that society should work to achieve? Note: The goal of your plan should be broad in the sense that it improves the issue or the improves the perceived problem. 2. Why is achieving the goal important for all of society not just a specific group of individuals? 1 st page

(1 to 2 slides) Proposed solution Summary of Proposed Solution: Develop a creative, realistic, and legal solution to the problem. Your solution cannot violate the constitution. What is your plan? What specific issue(s) or behaviors is your policy addressing? Note: this can be a very specific component of the problem. Is there an optimal level to you intend to achieve? Do we need more or less of something? Is your plan using the government or forces outside of the government? Why is your plan a preferred option over the alternative researched? 1 st page

Method of Implementation 1. How would you phase in the plan? 2. How would you sell your plan to the public? 3. What is the time frame or schedule of the plan? 4. What are certain benchmarks that you would be looking to achieve? 5. How would your plan be enforced? a. Government force b. Self Interest c. Equilibriums d. forces outside of the government such as competition, price, reputation, etc. 6. Would your plan address the entire population and country or just specific portions? This is also a good place to include data, graphs, facts and figures QR codes for background, data, and youtube videos 1 st page

Method of Testing 1. What would success look like? 2. What evidence would you gather to determine the level of success? 3. How would you determine if the policy had a universal impact across all regions, demographics, and age. 4. Would you use federalism? Apply plan on only certain states, local regions, cities (these would serve as your treatment group) and compare to areas that don’t use the plan/act (control group). Note: To make this work the treatment group and control group need to be as identical as possible. 5. How would you test the results? This is also a good place to include data, graphs, facts and figures QR codes for background, data, and youtube videos 1 st page

(1 to 2 slides) Predictions Why do you feel this plan will work? What Political Party would support your plan? Why? What Political party would not support your plan? Why? What interest groups would support your idea? And what groups would oppose it? This is also a good place to include data, graphs, facts and figures QR codes for background, data, and youtube videos 1 st page