Blog

A different look at income inequality

Tagged: , , . | Category: Blog

December 17, 2014

An article from the American Enterprise Institute (AEI) blog caught my eye today.  The title reads “Top 400 taxpayers paid almost as much in federal income taxes in 2010 as the entire bottom 50%“, which is not a new thought rolling around in economic circles.  However, it struck me as very interesting that AEI uses IRS numbers and the site taxfoundation.org to make their point.

How is this possible when we continue to hear the rhetoric that the rich aren’t paying “their fair share”?  While there is no denying that the income inequality gap exists – and is, in fact, larger than we’ve seen in the United States in many years – the tax gap is a myth.  The richest 400 taxpayers in the U.S. paid a little over $19 billion in taxes at an average tax rate of 18%, while the lowest 50% of taxpayers in the U.S. paid about $22.4 billion at an average tax rate of 2.4%.

Wait.  2.4%? How is that even possible?

To help outline this, AEI uses federal income tax information outlined at the Tax Foundation.  I found this chart very interesting, as it shows the percentage of those who sent in tax paperwork but had zero or negative tax liability.  I could think of all kinds of ways this information could be used in the classroom, especially through leading questions – how can someone have negative tax liability?  How did we survive through the Great Depression, when over half of tax returns had zero or negative tax liability?  How in the world did it drop so fast by 1944, where there is only a 7.5% zero or negative tax liability?  What trends can be seen?

This is a great use of current issues and data to support the UFR Lesson 1.4 on Taxation and the National Debt.  The essential question for the unit is:  “Is there a fair and efficient way to fund and maintain the public services we want?”.  As students form an opinion and justification for the overarching question, ask them to show how this data helps or hurts their theories.

Posted by: | 0 Comments

Russia and Plummeting Oil Prices

Tagged: , , , , . | Category: Blog

December 12, 2014

The fear of deflation lives in the Eurozone, but the rapidly decreasing oil prices have hit Russia’s economy hard.  Economist Paul Krugman blogged about comparisons between current-day Russia and 1983 Venezuela, when the economy was almost destroyed.  He points out the private-sector borrowing and oil-dependent economy could cause extreme problems come 2015.

The LA Times states the Russian economy has already collapsed – it just hasn’t shown yet.  CNN Money points out that as the ruble is crashing, the Russian central bank raised interest rates yet again;  rates were at 5.5% a year ago, and are almost double that now.  The ruble has dropped in value by over 40% in comparison to the US dollar.  Time Magazine questions whether Putin can continue a strong foreign policy in the face of a failing economy, and Business Insider flat out says Russia is in big trouble.

So if inflation is rising and deflation is a fear in the Eurozone, how would this affect the world economy and the United States?  Have student research inflation and deflation, focusing in on years of deflation as with the UFR lesson on Greece, and hyperinflation in Germany in the Interwar years.  How could these live side by side?

 

Posted by: | 0 Comments

The Euro – Political Cartoons

Tagged: , . | Category: Blog

December 10, 2014

The political cartoons included in this blog are selected as tools to teach about public policy issues. Their inclusion does not in any way constitute an endorsement by Teachers College, Columbia University, of their point of view.

Political cartoons can be a powerful way to teach and talk about public policy issues in the classroom. They engaging, often funny, and they teach very complex ideas in a quick and intuitive way. We are so convinced of the value of political cartoons that, in addition to including them in many of our blogs, we feature posts that are all cartoons.

Using cartoons presents an opportunity to teach students media literacy, including the ability to detect point of view or bias. As a sequence, we strongly encourage students to study the cartoon carefully, analyze the specific context of the cartoon, and determine the cartoonist’s point of view. See the blog post of October 8, 2013 for a guide to using the political cartoons we have selected. The Library of Congress also has a a very useful Cartoon Analysis Guide.

 

156898 600 Superman Currency cartoons

Oguz Gurel, 2014

 

156751 600 ECB and Euro cartoons

Paresh Nath, 2014

 

155284 600 euro weakness cartoons

Joep Bertrans, 2014

 

145941 600 One by One cartoons

Pangli, 2014

 

 

Posted by: | 0 Comments

What’s going on in Europe? Deflation fears.

Tagged: , . | Category: Blog

December 2, 2014

Trying to decide what was important enough to make my first return blog post after a few months hiatus was more difficult than I thought.  So let’s turn to Europe for a post.

All over the media, there are rising concerns over the threat of deflation of the world market, especially the Eurozone.  The New York Times pointed out that the inflation rate across Europe is at 0.3% while the jobless rate hovered at 11%.  Bloomberg says that Europe is in deep trouble, and Business Insider states that Europe is already under the dark cloud of deflation.

A consumer looks at falling gasoline prices and thinks “Great!  It won’t cost as much to fill up my tank to get to work!”.  So why this fear of deflation?

In short, deflation can increase the real cost of debt and could cause the dreaded deflationary cycle we witnessed during the Great Depression of the 1930’s.  The deflationary cycle shows a connection between lowered prices and decreased production, which leads to lower wages, leading to decreased demand and lower prices (figure courtesy of investinganswers.com).

Greece is one of the countries seeing extreme drops in overall price levels.  They are also one of the Eurozone countries deepest in debt.  The Understanding Fiscal Responsibility lesson from World History on Europe’s debt crisis would be one way to bring students’ attention to what is happening in Europe, as well as focusing students attention in potentially easier-to-understand chunks of information, as the big picture can be overwhelming and confusing.  Start with talking about the current issue of deflation and debt – move to the lesson on Greece’s debt issues – and then bring the conversation back to the current day.  Students could research other historical deflation/debt issues, or research the guiding question of the unit:  when is one country’s problem everyone’s problem?

 

As an interesting side note, economist Paul Krugman suggests that the Eurozone debt crisis leads to the return of Keynesian economics.  As an extension activity, have students research what he means, and whether they think Keynesian economics is the answer to the issues facing the Eurozone.

 

Posted by: | 0 Comments

Brookings Institute: Understanding the Federal Debt

Tagged: . | Category: Blog

August 27, 2014

The Brookings Institute released a short video explaining the federal debt in comic format.  David Wessel, the Brookings’ Director of The Hutchins Center on Fiscal and Monetary Policy, outlines the general “the federal debt is okay as long as it stays a small percentage of GDP” argument in three minutes.

The video is very well done and easy to understand, and as soon as I saw it, I thought “Ah ha!  A great tie to UFR and the national debt!”.  What a great video to bring to students to align to the Economics lessons overall.  As I get ready to close my tenure on the UFR blog, I thought it would be interesting for students to look at the bigger picture – what do we want them to walk away from the UFR curriculum knowing and being able to do?  I think a fine example is taking information from current news sources and comparing them to the lessons is a great take away.

But…it would be important to always show the “other side”.  There are those economists that hate the national debt, and those who believe, as Wessel states, that it is necessary to balance the economy.  How can students find information to help them make a decision?

In my final blog post later this week, I’ll share some of the sources I’ve used to bring current policy and news to the UFR curriculum

Posted by: | 0 Comments

National Security and the Federal Budget – ISIS and the New Terrorism

Tagged: , . | Category: Blog

August 23, 2014

UFR Lesson 2.3 in the Civics portion of the curriculum looks at National Security Goals, the Federal Budget and the National Debt.  I thought it was a great opening to a lesson on the current situation in the Middle East and ISIS.  There are  a TON of political cartoons about ISIS and the beheading of the US journalist, James Foley.  Using political cartoons is a great way to show students differing points of view.

The political cartoons included in this blog are selected as tools to teach about public policy issues. Their inclusion does not in any way constitute an endorsement by Teachers College, Columbia University, of their point of view.

Political cartoons can be a powerful way to teach and talk about public policy issues in the classroom. They engaging, often funny, and they teach very complex ideas in a quick and intuitive way. We are so convinced of the value of political cartoons that, in addition to including them in many of our blogs, we feature posts that are all cartoons.

Using cartoons presents an opportunity to teach students media literacy, including the ability to detect point of view or bias. As a sequence, we strongly encourage students to study the cartoon carefully, analyze the specific context of the cartoon, and determine the cartoonist’s point of view. See the blog post of October 8, 2013 for a guide to using the political cartoons we have selected. The Library of Congress also has a a very useful Cartoon Analysis Guide.

152653 600 ISIS Coexist cartoons

Rick McKee, 2014

152591 600 ISIS Execution cartoons

Nate Beeler, 2014

152643 600 Iraq Lesson Not Learned cartoons

Pat Bagley, 2014

152593 600 World Falling Apart cartoons

Steve Sack, 2014

152620 600 Still cartoons

Mark Streeter, 2014

 

Posted by: | 0 Comments

Veterans Disability Compensation: CBO Analysis

Tagged: , , , . | Category: Blog

August 18, 2014

On the heels of the Social Security Trustees Report is a report from the Congressional Budget Office on Veterans Disability Compensation.  Although the report did not make the big splash like the Social Security report, it addresses the same issue:  how do we choose to allocate funds to support public programs?  What decisions need to be made to continue support?  How does this reflect policy priorities in our federal budget process?

This ties well to UFR Lesson 1.5 on Balancing the Federal Budget, but because of some specifics in the report, it may tie even better to UFR Lesson 1.4 on Taxation and the National Debt.  One of the suggestions to keeping VA disability benefits solvent is to begin to tax the benefits.  Have students analyze the issue and take a stance by using research skills and evidence they find.  Should VA benefits be taxed?

 

Posted by: | 0 Comments

Back to School!

Tagged: . | Category: Blog

August 18, 2014

The political cartoons included in this blog are selected as tools to teach about public policy issues. Their inclusion does not in any way constitute an endorsement by Teachers College, Columbia University, of their point of view.

Political cartoons can be a powerful way to teach and talk about public policy issues in the classroom. They engaging, often funny, and they teach very complex ideas in a quick and intuitive way. We are so convinced of the value of political cartoons that, in addition to including them in many of our blogs, we feature posts that are all cartoons.

Using cartoons presents an opportunity to teach students media literacy, including the ability to detect point of view or bias. As a sequence, we strongly encourage students to study the cartoon carefully, analyze the specific context of the cartoon, and determine the cartoonist’s point of view. See the blog post of October 8, 2013 for a guide to using the political cartoons we have selected. The Library of Congress also has a a very useful Cartoon Analysis Guide.

 

152293 600 School Supplies cartoons

Nate Beeler, 2014

 

151732 600 Back to School cartoons

Rick McKee, 2014

 

151693 600 Back to School cartoons

Jeff Koterba, 2014

 

 

Posted by: | 0 Comments

2014 Social Security Trustees Report

Tagged: , . | Category: Blog

August 16, 2014

The Social Security Administration has released the 2014 Trustees Report, projecting that the funds will be insolvent by 2033 if nothing is changed.   Even more alarming is the statement that the Disability Insurance (DI) program will be out of funds by 2016.  However, even after this time, it seems that payments will not be stopped, but rather cut by about 23% across the board.

The Center on Budget and Policy Priorities suggests that policymakers work to “save” DI and overall fix Social Security once and for all.  Reuters points out that as we keep putting bandages on the “wound” of Social Security, it gets harder and harder to do an actual fix.

At the same time, bloggers on USA Today and    are saying that all of this distracts from the real problem – reform.  A blog on Forbes states that Social Security is the Voldemort (He Who Shall Not be Named) of politics – no one will touch it for fear of backlash.

It’s a great time to talk with students and work through UFR Lesson 1.1on Social Security and the National Debt.  The essential question What costs and trade-offs are we willing to accept to ensure the benefits of income security to Social Security recipients? is a great way to encourage students to look at current news issues on the topic and draw their own conclusions based on fact.

Posted by: | 0 Comments

Sue or Impeach?

Tagged: . | Category: Blog

August 7, 2014

The political cartoons included in this blog are selected as tools to teach about public policy issues. Their inclusion does not in any way constitute an endorsement by Teachers College, Columbia University, of their point of view.

Political cartoons can be a powerful way to teach and talk about public policy issues in the classroom. They engaging, often funny, and they teach very complex ideas in a quick and intuitive way. We are so convinced of the value of political cartoons that, in addition to including them in many of our blogs, we feature posts that are all cartoons.

Using cartoons presents an opportunity to teach students media literacy, including the ability to detect point of view or bias. As a sequence, we strongly encourage students to study the cartoon carefully, analyze the specific context of the cartoon, and determine the cartoonist’s point of view. See the blog post of October 8, 2013 for a guide to using the political cartoons we have selected. The Library of Congress also has a a very useful Cartoon Analysis Guide.

 

151641 600 Boehner Blowing Smoke cartoons

Pat Bagley, 2014

 

151498 600 Impending Impeachment cartoons

Monte Wolverton, 2014

 

151700 600 Impeachment vs Lawsuit cartoons

Steve Sack, 2014

 

 

Posted by: | 0 Comments