Why the Euro Crisis Is an American Problem - Assignment Example

?4 Questions Question Why the Euro Crisis Is an American Problem The Euro crisis is an American problem, and American nationals should worry aboutit. Majority of people do not understand the implications of the disintegration of the European currency that is common to seventeen nations. It is important to note that the European Union is the largest economy in the world and a collapse or a fall of the euro zone would lead to a chain of bank failures, mass unemployment, financial crunches, and popular panic. It is estimated that the collapse could generate a 25% decrease in Europe’s gross domestic product (GDP). In effect, the euro crisis would represent a Great Depression of the current century, and this would be a threat to the global financial system (Zuckerman, 2011). According to Frum (2011), if the Euro falls, bonds will lose value in the European banks. This is because banks in the European region hold euro-dominated bonds. The bonds will lose value such that the banks will be forced to either seek assistance from the government, or put to a stop their lending to individual consumers and/or businesses (Frum, 2011). The fall of the euro will adversely affect other nations like Canada and the United States. For one, the financial institutions in Europe may lose their capacity to repay creditors in the United States. The net effect of the crisis will be more pressure on the financial system of the United States. Yet again, it should be considered that majority of the investors in the United States are from the euro zone , and if the eurozone economies fall, the Americans will have a difficult time raising capital for their businesses and new projects (Frum, 2011). The genesis of the crisis is very clear. Just like the United States, Europe was a victim of over-leveraging. The past decade has seen the European Central Bank overseeing easy credit, cross-border lending, and low interest rates which was instigated by a property boom and the increase of debt in households. The bubble has already burst, and the outcome has been the risk of failure to negotiate currency defaults and a series of frighteners (Zuckerman, 2011). It is worth noting that the majority of the Americans see the euro crisis as a crisis generated by government debt and government deficits. The same can be true of Greece, but it is not certainly true of France. If the Euro falls, each nation in the European region will be forced to have its own currency. This means that each nation will have to pay its debt using its own currency and not the euro (Frum, 2011). Europe’s option to avert the crisis is either to stop using the euro to restore each government to its own currency or to develop a single pan-European government to manage the new pan-European currency. Both options are not attractive to the United States. The United States has no option but to either suffer from the first option or contribute in support of the second option. Both options will have a considerable effect on the United States, and thus, the American cannot escape the euro crisis, it is their problem. Question 2: State Based Teaching Incentives to Improve Quality of Education Offered to Public Schools For a long time, the focus of the policymakers has been on improving or enhancing teacher quality. In the past few years, most reform efforts or initiatives have included strategies to enhance the overall quality of teachers and the equitable allotment of teachers within states, districts, and schools. The federal government endorsed an act in 2001in respect of education. The No Child Left Behind Act of 2001 is aimed at ensuring teacher quality and fair distribution of teachers. The act demands that all states evaluate the allocation of teacher quality, create, and implement plans to enhance teacher quality and assure fair distribution of quality teachers (Fuller, 2010). In the past, local districts have been designing and supporting their individual recruitment programs. This isolated approach generally develops inequities across the states. This is because wealthier districts possess resources that poorer districts do not have in the recruitment and retention of a quality workforce. Policymakers have addressed the issue of recruitment and retention through the development of new strategies that increase the supply of and offer incentives to teachers working in regions of highest need. Other than the interstate efforts, there are plans in some regions to develop interstate agreements that offer support to teacher recruitment in all states. The following paragraphs outline some of the incentives recently adopted in states across the nation (Hirsch, 2001). Majority of the states have made effort to increase the production pipeline by expanding the number of prospective teachers joining the teaching profession. Their different strategies include motivating early interest in teaching through community college cadet and secondary school programs. The programs make it possible for prospective educators to finish their degrees by providing them with loans and scholarships, and speeding up the process of earning teaching credentials through various ways. Additionally, most of the states have increased the minimum salaries for their workers in order to attract high quality people to the profession (the teaching profession). Some of the states are working in collaboration with the districts to create policies that will offer differentiated compensation for teachers working in high demand areas (Hirsch, 2001). For instance, in Texas, there are a number of state and district-level policy recommendations aimed at improving teacher quality and fair distribution of quality teachers. Some of the recommendations include improving the training of the district and school leaders and improving the accountability system of schools. In regard to improving the training of the district and school leaders, it has been noted that the relationship between teacher turnover and working conditions are primarily determined by the school leadership behavior. Thus, it is important for the superintendent programs to teach potential superintendents about strategies to balance teacher quality and distribution of teacher quality. In regard to improving the accountability system of the schools, it has been found that the current school accountability system of the state offers a disincentive for effective and well-qualified teacher s to move to schools that are low performing. Thus, it is important for the state to create incentives that will make it possible for the effective and well-qualified teachers in low-performing schools to work without much scrutiny, and added pressure (Fuller, 2010). Question 3: Incentives to Reduce Outsourcing In 2010, the Senate began considering the Creating American Jobs and Ending Offshoring Act. The bill will offer tax incentives to employers to maintain their jobs in the United States and to remove tax advantages for the outsourcing of work. The legislation was introduced in 2010, and it seeks to offer tax incentives to create jobs in the United States and to develop disincentives to shifting jobs overseas. In relation to offering tax incentives to create jobs in the United States, the bill will develop a payroll tax break for employers who prefer American workers to foreign workers. In particular, the measure offers a Social Security tax break (for two years) for all the wages paid to a United States employee who replaces a foreign counterpart. The payroll tax holiday is available for employees recruited for a three-year period starting on 22 September 2010. For one to be eligible for this tax break, the employer is required to certify or prove that the United States employee has replaced a foreign worker performing a similar or the same job (Schuman, 2010). In relation to discouraging foreign outsourcing, the legislation will stop employers from taking credit, loss, or a tax deduction if they cease or downsize operations in the United States and consequently reopen or expand overseas. Specifically, the employers will not be capable of counting the costs of shifting operations to overseas as an expense in their businesses. The prohibition will not be applicable to any severance costs or payments related to retraining employees fired or outplacement services because of outsourcing. Businesses will be capable of appealing for an exemption to the Treasury Secretary if those business activities do not lead to any loss of United States jobs. The bill will also end the ability of the employer to defer income taxes earned through foreign subsidiaries until the income is returned to the United States (Schuman, 2010). In general, the bill will discourage foreign outsourcing by companies in the United States. The move has received significant support from a number of people. The proponents of the idea that foreign outsourcing should be eliminated argue that Congress can execute reforms to ensure that American companies do not take advantage of the offshore tax incentives. They suggest that sending jobs overseas reduces the United States long-term tax base. Thus, the creation of incentives to keep manufacturing jobs in the United States will have a long-term impact of increasing the tax base without the need to raise taxes. The ultimate impact will be reducing interest payments and debts. The proponents suggest that two solutions to discouraging outsourcing offshore. First, creating tax incentives to minimize the trend in outsourcing and, therefore, retain jobs in the United States. Second, the companies to embrace change processes in which each American worker is offered with education (financial literacy), tools, and competitive and market intelligence that will lead to significant improvement in performance needed in the current global business environment (Shaner, 2011). In a nutshell, eliminating foreign outsourcing will increase United States long-term tax base and create more manufacturing jobs. Question 4: Healthcare – Origin, Structure of the System, Changes That Are In Process, Pros, and Cons of Each Form The modern United States healthcare system did not begin until after the Second World War. Before that time, the healthcare system was an institution that was poorly developed, and it only accounted for a slight proportion of the resources in the society. It remained an unknown institution until the time after the Second World War. From this period, it started rapidly rising to become the major United States institution. The growth of the United States healthcare system after the Second World War can be classified into six stages. The first stage was in the 1950s, and it is characterized by the emergence of contemporary medicine. The other stages include 1960s (medicine golden age), 1970s (questioning of the system), 1980s (the huge transformation), 1990s (emergence of the healthcare paradigm), and 2000s (the new millennium healthcare) (Thomas, 2003). The United States healthcare system is composed of both the public and private insurers. However, the private insurers dominate over the public insurers. Public health insurance is made up of Medicare, Medicaid, and other public systems. Medicare is a federal program which covers people aged 65 years and above, and some of the disabled individuals. Medicaid is a program created for the disabled and low-income individuals. The program also covers elderly, parents, disabled, children, and very poor pregnant women. This program does not cover a majority of the poor people and childless adults. Other public systems include S-CHIP (State Children’s Health Insurance Program), and VA (Veteran’s Administration). Private health insurance is composed of the employer-sponsored insurance and private non-group (individual market). The employer-sponsored insurance is the main way through Americans receives health insurance in the United States. In this form of insurance, the employer offers health insurance as a part of employee benefits package. The individual market (private non-group) covers a section of the population that is retired or self-employed. It also covers some of the individuals who cannot access insurance from their employer (Chua, 2006). There are a number of changes proposed by the Senate and House bills endorsed in 2009. However, the bills dealt with almost similar issues. The bills prefer tougher regulations for the insurers. The bills also propose the establishment of an individual mandate, setting up of insurance exchanges for those not covered by their employers, offering subsidies for the poor, and payment for the majority of the reforms through minimizing waste in Medicare program (BBC, 2010). However, the Senate Healthcare Reform Bill is receiving significant criticism for its inability to support the reform ideals. It has been criticized for lacking a public insurance alternative to reduce premiums and compete effectively against the private sector. Individual mandates will make it compulsory for everyone to purchase health insurance from insurers in the private market. However, most argue that forcing individuals to purchase health insurance will place them in unwanted financial strain. Medical malpractice has been completely overlooked in the current bill, and this is a major disappointment to the medical professionals. It is very clear that the healthcare reform status will have significant impacts to both physicians and the patients (Naqvi, 2011). References BBC. (2010, March 22). Q&A: US healthcare reform. BBC. Retrieved from http://news.bbc.co.uk/2/hi/8160058.stm Chua, K. (2006). Overview of the U.S. health care system. Retrieved from http://www.amsa.org/AMSA/Libraries/Committee_Docs/HealthCareSystemOverview.sflb.ashx Frum, D. (2011, November 17). Why the euro crisis is an American problem. CNN. Retrieved from http://edition.cnn.com/2011/11/14/opinion/frum-euro-american-problem/index.html Fuller, E. (2010). Study on the distribution of teacher quality in Texas schools. Texas: The Association of Texas Professional Educators. Hirsch, E. (2001). Teacher recruitment: Staffing classrooms with quality teachers. Denver, CO: State Higher Education Executive Officers. Naqvi, I. (2011, February 13). The state of healthcare reform: Medical and political perspectives. The Next Generation. Retrieved from http://www.nextgenmd.org/archives/831 Schuman, L. (2010, September 27). Senate considers bill designed to reduce outsourcing of U.S. jobs. Employment Law Update. Retrieved from http://www.dcemploymentlawupdate.com/2010/09/articles/business-restructuring/senate-considers-bill-designed-to-reduce-outsourcing-of-us-jobs/ Shaner, D. (2011, August 11). Outsourcing & the seven arts of change. Connect. Retrieved from http://davidshaner.tumblr.com/post/8837706339/outsourcing-the-sevens-arts-of-change Thomas, R. K. (2003). Society and health: Sociology for health professionals. New York, NY: Springer. Zuckerman, M. B. (2011, December 14). Mort Zuckerman: Why America should worry about the euro crisis. U.S. News. Retrieved from http://www.usnews.com/opinion/mzuckerman/articles/2011/12/14/why-america-should-worry-about-the-euro-crisis- Read More