America's Poorest Are Getting Virtually No Assistance
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Macroeconomics by definition is the part of economics that is concerned with large-scale or general economic factors, such as interest rates and national productivity. It is used to examine the overall behavior of an economy on a daily basis. It closely measures things such as economic growth, unemployment and poverty, inflation and interest rates, exchange rates and other aspects of performance. Any discussion on macroeconomics must also look at the policies influencing macroeconomic variables. The goal of these policies is to ultimately improve the social welfare of the country, however many of the policies, currently in place, are dated and proven to be ineffective.
In the article "America's Poorest Are Getting Virtually No Assistance,"…show more content… Government policies change as often as political parties switch back and forth between generic answers that only effects who gets elected. Is there such a thing as doing too much? Can you provide too much of the wrong kind of help? By providing all the basic needs for survivability one might argue that people lose the incentive to work. Under the current system the government provides assistance to the poor but as the poor earn income to support themselves the government reduces the level of assistance it provides. With this sort of program every $1 that someone earns would decrease their assistance by $1. As a result, the person will earn no net gain for working. This problem is called the poverty trap. In order to reduce the bite of the poverty trap, requirements for work much be imposed as a condition for receiving benefits and a time limits must be…show more content… There’s nothing wrong with these programs because they can alleviate a lot of suffering, but they shouldn’t be confused as being the solution to ending poverty. These programs can no more end poverty than an Army field hospital end the war. In order to end poverty the problem must be looked at socially and economically. Bernstein seems to only look at the problem socially while Chapter 14 of our reading discusses the problem both socially and economically. Chapter 14, of Principles of Economics proposes that instead of decreasing government assistance $1 for every $1 earned, once someone begins earning income, that it only be decreased by .50 cent. This model provides room for progression up out of poverty. The comparison between the current policy of reducing every $1 earned by $1 and the proposed solution can be seen in the below