The United States Aggregate Expenditures in the 1980s - Essay Example

OUTLINE US AGGREGATE EXPENDITURE IN THE 1980S A. TYPES OF US AGGREGATE EXPENDITURES B. DISTRIBUTION OF US AGGREGATE EXPENDITURES C. IMPACTS OF SUSTAINED EXPENDITURES ON THE US ECONOMY UNDEREMPLOYMENT IN THE EUROPE IN THE 1980S A. THE PHENOMENON OF UNDEREMPLOYMENT B. THE NEED FOR PROVISION OF JOBS C. THE IMPACT OF UNDEREMPLOYMENT Introduction US Aggregate Expenditures in the 1980s Government policymakers and officials would do everything in their power to make a strong case for government action. They would present various statistics that document the need for the program. They would argue that non-governmental action were inadequate or impractical to address the needs of the people. They can also claim that the government program is implementing its assigned task. All these types of action point to a higher US aggregate expenditure in the 1980s. The different types of expenditures refer to education, pension services and agricultural subsidies and trade subsidies. Underemployment in Europe in the 1980s Underemployment and unemployment has had very damaging effects to the social and economic fabric of Europ. Underemployment is an immense social evil and a colossal economic waste. Unederemployment leads to an enormous degree of personal hardship and misery. It also destroys familial relationships, breeds racism and sexism and paves the way to social disintegration. Undermployment is the primordial factor for the alarming growth of inequality and poverty. A. TYPES OF US AGGREGATE EXPENDITURES The aggregate expenditure of the United States in the 1980s were focused on pension provision, education public works, defense spending and healthcare. Education expenditure in most developed countries constitutes 6% of GDP. Private expenditure in education adds two/thirds of a percentage point. United States private spending in education equals 1.6% of GDP. Higher levels of education expenditure reflect the importance attached to education at the policy level and also at the individual levels. Education is helpful for economic and social progress. Between 1970 and 1988 real spending in education had increased by 50% in the US. Pension expenditure is highly dependent on demographic changes in population and age structure. The onset of ageing has increased the pension burden on public budgets. (Joyce and Mullins, 1991) Numerous public works projects show a favorable benefit-cost ratio. Lifestyle improvements in transportation and communications help citizens enjoy a better lifestyle. Defense expenditures help protect democracy in America and around the world. A portion of the aggregate expenditure also goes to the payment of interest on the national debt. As a result, consumption outlays usually dominate the Federal budget and state budgets. (Joyce and Mullins, 1991) B. DISTRIBUTION OF US AGGREGATE EXPENDITURES The table indicates that, as a component of total state spending, state education and health/hospital spending have experienced a slight relative increase over time, while highway spending has declined dramatically, and public welfare spending has experienced a large relative increase. For local governments, the shifts have been toward health and hospital spending and away from education, highway and public welfare spending. The state's share of total spending has increased slightly overall. State spending on education and public welfare has increased significantly over the 23 year period since the 1970s. The expenditures for capital outlays, health and hospital spending, and highway spending has diminished. In addition, the state share of revenue and taxes should decline, as should the state share of expenditures. There are shifts for states with in four areas: 1) state taxes as a percent of total state general; 2) state aid to local government as a percent of local general revenue; 3) local taxes as a percent of local general revenue; and 4) local property taxes as a percent of total local general revenue. C. IMPACTS OF SUSTAINED EXPENDITURES ON THE US ECONOMY In the 1980s, local taxes decreased as a percentage of total local revenues. In general, government expenditures had increased. The total government expenditures consisted of capital expenditures, educational expenditures, highway expenditures and public welfare expenditures which covers pension payments to the elderly. The state share of total expenditures declined slightly, fueled by a substantial reduction in the state share of public welfare expenditures. (Joyce and Mullins, 1991) Public welfare expenditures also cater to the housing needs of homeless Americans. The Coalition for the Homeless, reported to Congress in 1980 that there were 2.2 million homeless Americans. In 1986, the Neighborhood Reinvestment Corporation, pegged the number of homeless at 3.0 million. (Payne, 1991). The state share of education spending had risen compared to the average for all states. In addition, the state share of total spending and education spending remained constant. State welfare spending and highway spending had diminished. Capital spending had increased in the 1980s. (Payne, 1991) THE PHENOMENON OF UNDEREMPLOYMENT IN EUROPE Employment provides the basic means of distributing wealth in any society and provides subsistence for young families. It also ensures the provision of adequate pensions for the elderly. Hence, the persistent underemployment in Europe has led to devastating impacts to the families and the immediate communities. C. THE NEED FOR PROVISION OF JOBS In general, European countries experienced a serious shortage of work in the 1980s. The shifting technological developments had resulted in redundant labor. It also led to fewer parttime jobs. The demand for work is set both by demographic factors and the cultural changes in an economy. The volume of employment depends on the agriculture, services and business sectors. The demand for local products and services depends on the population size and income of the local population. Areas such as North-East England and Southern Italy had very high underemployment rates. These areas were unable to resolve the human problems of underemployment. Portugal, Greece, Italy, and Spain all have low rates of part-time employment for married women. The low percentages of married women who work part time convey the situation where the demand for labor force is intermittent. (Figart and Mutari, 2000). Portugal, Italy and Spain have provided pro-rata benefits to those who undertake part-time work since 1984. Part-time jobs enabled employers to have flexible work schedules but not the opportunity to violate existing labor standards. Part-time work had developed in the service sectors in southern Europe. This increase in part-time employment is documented in national case studies of flexible working in the retail sector in Spain and Greece. Part-time employment and married women's labor force participation are lower in Italy compared to other European countries. In general, the male breadwinner model is still the one which prevails in the European labor market. The United Kingdom reported the highest percentage of male overtime and the second highest percentage of married women working part time. Women's labor force participation is higher compared to other European countries. However, women are concentrated into part-time jobs that allows for the household division of labor. The UK model indicated problems with unsupervised labor markets where there is less state support for family life. Ireland has a relatively low labor force participation rate for married women. Finland has low rates of married women working part time. Despite the dearth of part-time jobs, Finland recorded a high labor force participation by women. Finland had provided family support services such as child care. France had high labor force participation for married women. French policymakers have regarded part-time jobs as a solution to balance work and family demands. Denmark, in contrast, has seen a decline in the percentage of women working part time. (Figart and Mutari, 2000) D. THE IMPACT OF UNDEREMPLOYMENT Underemployed people suffer from various negative health and social consequences. Suicides by the underemployed in the 1980s had established the link between unemployment and poor health. Underemployed young people and adults report heavy depression, greater general distress, lower self-esteem and more stress and anxiety. In addition, researchers have found that unemployed women tend to suffer from poor mental health. Community psychologists and experts in medical sociology agree on the causal connection between employment status and an individual's well-being. Various longitudinal studies have shown that poverty and poor mental health have a sequential reciprocal relationship (Dooley and Catalano, 1991) Bibliography Dooley, David and Ralph Catalano. 2003. Introduction to Underemployment and Its Social Costs. American Journal of Community Psychology. Volume: 32. Issue: 1-2. Page 1. Figart, Deborah and Ellen Mutari, 2000, Work Time Regimes in Europe: Can Flexibility and Gender Equity Coexist, Journal of Economic Issues, Vol 34, Issue 4, Page Number 847. Joyce, Philip and Daniel Mullins, 1991, The Changing Fiscal Structure of the State and Local Public Sector: The Impact of Tax and Expenditure Limitations, Public Administration Review, Vol 51, Issue 3, Page Number: 240-253. Payne, James, 1991, The Culture of Spending: Why Congress Lives beyond Our Means, San Francisco: Ics Press. Townsend, Alan. 1997. Making a Living in Europe: Human Geographies of Economic Change. London: Routledge Read More