The objective for this paper is to explain what I have learned from our class discussion and our readings of Chapter 30 of our text, Economics Today. It will show my personal understanding of this week’s objectives through explaining what I have learned by analyzing the impacts of government regulation of the economy, including the rationalization for and history of regulation, degrees of success, and future consequences if regulation does or does not occur while applying economic concepts to explain income distribution, and its connection lifestyle choices and opportunities.
In this week’s assignment, to relate them to my life experiences, I have selected two articles relating to this topic, Income, Poverty, and Health Care, and I will be explaining why we are to review what has been happening lately, and why it is happening? The first article that I have chosen relates to the same topic as our class discussion, healthcare. I chose this because it is highly relatable to not just a small group of individuals, but every American citizen in the United States.
Obamacare, or Affordable Care Act, will take effect on October 1, 2013, and it is viewed as “when poor and middle-class Americans will begin signing up for the health care law’s new benefits. ” (Young, J. (1-19-13)) To make sure that everyone signs up for this new healthcare program, they have created “Enroll America, an umbrella organization of nonprofits and health care industry organizations, that will carry out a major national public education campaign with paid advertising, online outreach, community activities and coordination. (Young, J. (1-19-13)) The major problem that most will have a hard time swallowing is the fines that you will receive, either as an individual, or as an employer.
Government Health Insurance Mandates – If an individual does not have insurance they will be required to pay a fine of up to “$750 per year or up to $2,250 per year for a family that is uninsured. Firms with more than 50 employees will receive a fine of $750 for every employee that obtains federal subsidies for coverage. ” (Graham, J. & Kaye, D. (2006) Pg. 79) One issue that most people would not even think about concerning the new healthcare laws is that it is going to affect out budgets a great deal more than we first thought. I know that I was shocked to learn that our family pets’ routine visits to the veterinarian office will also come with a higher price tag due to the new healthcare law.
While they said this is unintended, the fact that “medical equipment and supplies will be going up in cost, that extra expense will have to passed on to the customers. (CBSMiami (3-11-13)) Most would wonder how this would affect their office visit for their furry family members. Well, “it’s part of a new 2. 3-percent federal excise tax on certain medical devices that just went into effect. The tax will help fund the Patient Protection and Affordable Care Act, intended for people, not pets. ” (CBSMiami (3-11-13)) We know that the manufacturers will have to pay this tax, which will in turn cause their costs to produce these products, to rise. They will have no choice but to have to transfer these costs onto the consumers.
This affects our vet visits because some of the products that were meant for humans also are used in our vet’s office, such as “IV pumps, sterile scalpels and anesthesia equipment. ” (CBSMiami (3-11-13)) This week’s topic relates to one that I had discussed not too long ago in my Macroeconomics class. Since we are to be charged an additional tax to cover this new law in healthcare, I thought it would be appropriate to bring up the following information. The hoped for results of taxation and government spending as implied by the fiscal policy, is to help keep our economy out of a recession, or even worse, a depression.
Depending on how fiscal policy is used in different situations, it will affect different people, and is not always helpful to the whole economy. The economy needs to be closely monitored and adjusted on a constant basis based on what is currently, or what is expected in the future of the economy. In times of high inflation, the government will increase the taxation rate to help build up the economy and keep the inflation rate down. Fiscal policy has the right to increase or decrease government spending which can raise or lower the overall economy monies in circulation.
With this being said, it makes it clearer as to why we are taxed higher as the government increases its public spending. It may not seem understandable to the general population because most are not in agreeance with this new healthcare law. Many believe the increase in taxes will not cover the costs that are going to be associated with the healthcare mandate, which will in turn cause the federal and individual states to also raise their taxes or reduce their healthcare costs in order to balance out the increased funding needed to support these new laws. (Graham, J. Kaye, D. (2006) Pg. 681)
I must say that after digging deeper into this subject, I am more appalled at the fact that this new “healthcare reform act” may potentially damage our society instead of help it. In the current state of our economy, which is shaky to say the least, does our government really think this will help us? I for one am not too sure. I do not want to get slapped with a fine because I choose not to purchase healthcare, but taking on an extra payment, when our pocketbooks are already stretched past their limits, is just as equally disconcerting.