Question

13) what are some byproducts of our economy that are not consistent with high GDP? 14) for the following please refer to the handout that you will receive in class: 15) what is the difference in the democrats explanation for the lack of insurance as opposed to the republican point of view? 16) how many more Americans were without health insurance in the 4th quarter of 2018? 17) what is the reason for the rising number of people without health insurance?

Answer 1

Ans13 -   There are many ways to look at GDP.

1. Total Value Added by the citizens of a country. Bricks are made with earth and coal. Both are naturally occurring materials. A brick maker has to buy coal from a coal miner or earth from a clay quarry miner. After he uses the two input materials he produces bricks. The difference between the sale proceeds of bricks and the cost of input materials is the value the brick maker added. If the same person had the ability to make a product like a car, he would have added more value. So the economy of a country is proportional to the skill sets , knowledge, education or in one word the productivity of the citizens of the country.
2. Total Income of all the citizens of the country. As seen above the brick maker added value to clay and coal to make bricks. Now he may have taken help from other people in the process of making bricks. He has to pay wages to these people who helped him in transport of input and output products, mixing clay and water to form raw bricks, maintaining the kiln temperature etc. These people make an income from the enterprise of the brick maker. The brick maker invested money to build the kiln and to buy the raw materials clay and coal. So the income of all the people including the profit margin of the brick maker is dependent on the fact that he invested in the brick kiln. So income of all citizens in a country depends on the total investment in the country in businesses and industries.
3. Total value of goods and services sold in the country. All goods and services sold in the markets are something that the citizens of the country have added value to. So the total value is a measure of the economy of the country.

How are GDP and Economic growth related. GDP and economic growth are not related. But economic growth is measured by observing the growth of GDP historically. While the above is true , you should be aware that there is a difference between nominal GDP and real GDP. What is the difference and how does it matter. Let us say a country has 100 citizen that grow 1000 kg rice each and sell it at all 20 bucks a kg. The GDP of the country is 2,000,000 bucks. Now in the next year the 100 citizen produce the same 1000 kg rice but sell it at 22 bucks a kg. The GDP grows to 2,200,000 bucks. Has the economy grown? Yes but that is the nominal growth. But if you compare with the previous year, the profuctivity is the same 1000 kg rice per person . So there is no real growth. Real growth is zero. So to compare GDPs between two years the gross value of production is calculated using this year's production and the comparing years prices. Or in other words the GDP is inflation adjusted.

If the next year the 100 citizens had produces 1100 kg of rice then the Value of production would be 1100 x 20 ( the previous year price of rice ) = 1100 x 20 x 100 = 2,200,000 bucks. That is a 10% growth in economy.

That is how GDP is related with economy.

GDP growth is a measure of economic growth.

There are some other factors that are part of GDP that are not considered in the above discussion. The 4 components of GDP are public consumption, government spending, gross fixed capital formation and ney exports. While the first two are covered by the methods of finding GDP, the last two are not. Fixed capital formation has a part that covers plant and machinery and cost of raw materials. So most of the amount is covered by GDP but cost of land and money as loan is not covered. They are minimal compared to other factors. Net exports means export - import. So export earnings are not covered by the three ways mentioned above while imports may get included. However if you look from the point if view of total income or total value added GDP is a measure of the economy.

Finally, GDP per capita is a measure of the standard of living of the country. A country with better GDP per capita has on the average has people living better as they will be eating better, living in better homes in better environment, riding better card on better roads, and do on and so forth.

Ans15 -  

Here are 5 huge differences in the party platforms:

1. ABORTION

Democrats: "We believe unequivocally, like the majority of Americans, that every woman should have access to quality reproductive health care services, including safe and legal abortion."

Republicans: Abortion should be illegal in all cases and the Constitution should ve amended to ban the procedure.

"We assert the sanctity of human life and affirm that the unborn child has a fundamental right to life which cannot be infringed," the platform said.

The GOP argued that supporting the constitutional right to abortion was the "extreme" position.

2. SAME-SEX MARRIAGE

Democrats: Applauded the U.S. Supreme Court decision that legalized same-sex marriage.

Republicans: Condemned the court decision.

"Five unelected lawyers robbed 320 million Americans of their legitimate constitutional authority to define marriage as the union of one man and one woman," the platform said.

3. IMMIGRATION

Democrats:  Called for fixing the "broken immigration system," including a path to citizenship for 11 million undocumented immigrants.

Republicans: Embraced Trump's call for a wall along the U.S-Mexican border though was silent on whether to back their nominee's demand to deport all 11 million.

4. CLIMATE CHANGE

Democrats: "Climate change poses a real and urgent threat to our economy, our national security, and our children's health and futures."

Republicans: Cast doubts on whether the climate is changing, rejecting the findings of the United Nations' Intergovernmental Panel on Climate Change as "a political mechanism, not an unbiased scientific institution" with "intolerance toward scientists and others who dissent from its orthodoxy."

5. MEDICARE

Democrats: They would not only would "fight any attempts by Republicans in Congress to privatize, voucherize, or 'phase out' Medicare," but would allow Americans older than 55 to enroll.

Republicans: They would end the health care program for the elderly as we know it, requiring seniors to either enroll in a private insurance plan or face limits on how much the government will pay.

Ans17 -   

Health care is cheapest when we share the costs of insurance among us all. Obamacare distributed health care costs more equally among everyone by requiring that everyone had health insurance. It also provided subsidies to help those less able to afford it to purchase health insurance.

Led by Donald Trump, Republicans are seeking to destroy this delicate balance. Trump has eliminated the requirement that people have health insurance and has unilaterally attempted to destroy subsidies to help those who can’t afford decent health care. As a result, fewer people will have health insurance, and the cost of health care for those covered by insurance programs is rising. That’s why we need to do everything possible to stop Donald Trump and to get him and the Republicans out of control of government as soon as possible.

In addition, health care costs have risen at a higher rate than overall inflation. Part of that is that people value more health care and are choosing to devote more of their income to health care in an effort to increase their quality of life and perhaps to live longer. The efforts by health care providers to urge people to consume more health care probably also play a role in the increasing demand for health services.

Some people believe that fraud and negligence also are drivers of health care cost increases. With huge bureaucracies involved in health payment systems, there is more room for fraud, as unscrupulous individuals seek to bill for services that haven’t been delivered or that are below standard. Law suits for substandard care are also seen by some to drive up health costs, although this is mostly because they perceive the incidence of frivolous law suits to be a significant portion of law suits. They may also not see the value of using legal solutions to keep providers responsible for improving care.

Between Donald Trump’s incredibly short-sighted and malicious policies and the increasing demand for health care as a way to improve both quality and length of life, health care costs are rising much faster than costs in other sectors of the economy. In fact, in some areas, such as technology, costs are going down, or at least, we get much more for the same amount of money (think of the speed of computing). Health care is an area where human resources are a huge part of the cost, so even with technological advances, the cost of labor continues to increase, and that’s not something you can replace with machinery.

Health care will probably always be a sector of the economy that sees higher rates of cost increases than other areas of the economy simply because of the importance of human labor in order to provide health services. The human component of health care is probably not going to be easily replaces, since human beings seem to need human touch.

But we don’t need Donald Trump and the Republicans to make things even worse. They don’t understand that letting people opt out of the commonweal will drive up costs for everyone else and make our overall health worse. We will pay for this in the long run with shorter life spans and an overall health rating that equals those of the poorest countries in the world. Part of the solution to rising health care costs is to get rid of Donald Trump and the Republicans in the state and federal governments.