Post by edwardsimms on Dec 13, 2007 9:12:59 GMT -4
Goals and Agenda
Outlined by this medium, you'll find the goals and the agenda that the ministry intends on pursuing and accomplishing during the Minister's term.
1: Return to the Basics - Economic Principles
[glow=red,2,300]a. Economic Freedom[/glow]
Freedom to produce, trade and consume any goods and services acquired without the use of force, fraud or theft. Economic freedom is embodied in the rule of law, property rights and freedom of contract, and characterized by external and internal openness of the markets, the protection of property rights and freedom of economic initiative. It is usually associated with a free market system. Numerous empirical studies have found that, among other beneficial effects, economic freedom promotes economic growth and poverty reduction.
[glow=red,2,300]b. Rule of Law[/glow]
One of the prerequisites for economic freedom is the rule of law. Basically, the rule of law means that the government must be ruled by the law and subject to it. The rule of law requires existence of widely shared cultural values and ethical norms, because the state, or people in power, in the absence of a widespread social consensus about what is just can violate the rights of citizens, sometimes by turning one group against the other. In such conditions government can issue arbitrary and inconsistent decrees that dissimulate individuals by creating uncertainty about consequences of their actions. However, the certainty of law does not mean absence of any change but absence of perpetual and unpredictable changes in laws. Absence of such changes is highly important for the efficient running of a free society and economic coordination. For example, prominent economist and political philosopher Friedrich Hayek had argued that the certainty of law contributed to the prosperity of the West more that any other single factor. Other important principles of the rule of law are the generality and equality of the law, which require that all legal rules apply equally to everybody. These principles can be seen as safeguards against severe restrictions on liberty, because they require that all laws equally apply to those people who have political and coercive power and to those who are governed. Principles of the generality and equality of the law exclude special privileges and arbitrary application of law, i.e. favoring one group at the expense of other citizens. According to Friedrich Hayek, equality before the law is incompatible with any activity of the government aiming to achieve the material equality of different people. He asserts that a state's attempt to place people in the same (or similar) material position leads to an unequal treatment of individuals and to a compulsory redistribution of income.Both of those actions are contributing to a decline in economic freedom.
2. Trading
[glow=red,2,300]a. Free trade[/glow]
Free Trade can be contrasted with protectionism, which is the economic policy of restricting trade between nations. Trade may be restricted by high tariffs on imported or exported goods, restrictive quotas, a variety of restrictive government regulations designed to discourage imports, and anti-dumping laws designed to protect domestic industries from foreign take-over or competition.
Governments often call managed international trade agreements "free trade", and although this is not really free trade, such treaties may result in freer trade.
Free trade is a term in economics and government that includes:
trade of goods without taxes (including tariffs) or other trade barriers (e.g., quotas on imports or subsidies for producers)
trade in services without taxes or other trade barriers
The absence of trade-distorting policies (such as taxes, subsidies, regulations or laws) that give some firms, households or factors of production an advantage over others
Free access to markets
Free access to market information
Inability of firms to distort markets through government-imposed monopoly or oligopoly power
The free movement of labor between and within countries
The free movement of capital between and within countries
3. Taxation
The immediate effects of a tax cut are, generally, a decrease in the real income of the government and an increase in the real income of those whose tax rate has been lowered. In the longer term, however, the effect on government income may be reversed, depending on the response that tax-payers make. Depending on the original tax rate, tax cuts may provide individuals and corporations with an incentive for investments which stimulate so much economic activity that even at the lower rate more net tax revenue will be collected.[citation needed]
The longer term macroeconomic effects of a tax cut are not predictable in general, because they depend on how the taxpayers use their additional income and how the government adjusts to its reduced income. Three idealised scenarios can be hypothesised:
[glow=red,2,300]a. Cutting Spenditure, Increasing Taxes[/glow]
Government cuts its expenditure, and taxpayers increase theirs, spending the money on commodities sourced from within the country. This combination is macroeconomically neutral, but advocates of a free-market economy argue that it improves economic welfare, since people are more accurate than the government in spending money on commodities that they actually want.
b. Maintaing Spenditure, Increasing taxes
Government maintains its expenditure (thus incurring debt), and taxpayers increase theirs, spending the money on commodities sourced from within the country. This combination provides a stimulus to the economy, and it is on these grounds that advocates of supply-side economics frequently argue for tax cuts. It should lead to economic growth, bringing about greater general prosperity, though unless managed carefully it will also lead to inflation. A government making tax cuts and incurring debt usually hopes that the economic stimulus of the tax cut will be large enough to produce a long-term increase in tax revenues, allowing the debt to be paid off in the future. If that does not occur then the government can be left with a severe budgetary crisis.
[glow=red,2,300]c. No Tax Increase, Steady Government Spenditure [/glow] (PRIMARY!)
Government maintains its expenditure (thus incurring debt), and taxpayers either save their increased income or spend it on commodities sourced from outside the country. This combination is not inherently deflationary, but it contributes to balance of payments difficulties which may have secondary deflationary effects and as noted above may lead to a government budgetary crisis with a painful readjustment to follow
Outlined by this medium, you'll find the goals and the agenda that the ministry intends on pursuing and accomplishing during the Minister's term.
1: Return to the Basics - Economic Principles
[glow=red,2,300]a. Economic Freedom[/glow]
Freedom to produce, trade and consume any goods and services acquired without the use of force, fraud or theft. Economic freedom is embodied in the rule of law, property rights and freedom of contract, and characterized by external and internal openness of the markets, the protection of property rights and freedom of economic initiative. It is usually associated with a free market system. Numerous empirical studies have found that, among other beneficial effects, economic freedom promotes economic growth and poverty reduction.
[glow=red,2,300]b. Rule of Law[/glow]
One of the prerequisites for economic freedom is the rule of law. Basically, the rule of law means that the government must be ruled by the law and subject to it. The rule of law requires existence of widely shared cultural values and ethical norms, because the state, or people in power, in the absence of a widespread social consensus about what is just can violate the rights of citizens, sometimes by turning one group against the other. In such conditions government can issue arbitrary and inconsistent decrees that dissimulate individuals by creating uncertainty about consequences of their actions. However, the certainty of law does not mean absence of any change but absence of perpetual and unpredictable changes in laws. Absence of such changes is highly important for the efficient running of a free society and economic coordination. For example, prominent economist and political philosopher Friedrich Hayek had argued that the certainty of law contributed to the prosperity of the West more that any other single factor. Other important principles of the rule of law are the generality and equality of the law, which require that all legal rules apply equally to everybody. These principles can be seen as safeguards against severe restrictions on liberty, because they require that all laws equally apply to those people who have political and coercive power and to those who are governed. Principles of the generality and equality of the law exclude special privileges and arbitrary application of law, i.e. favoring one group at the expense of other citizens. According to Friedrich Hayek, equality before the law is incompatible with any activity of the government aiming to achieve the material equality of different people. He asserts that a state's attempt to place people in the same (or similar) material position leads to an unequal treatment of individuals and to a compulsory redistribution of income.Both of those actions are contributing to a decline in economic freedom.
2. Trading
[glow=red,2,300]a. Free trade[/glow]
Free Trade can be contrasted with protectionism, which is the economic policy of restricting trade between nations. Trade may be restricted by high tariffs on imported or exported goods, restrictive quotas, a variety of restrictive government regulations designed to discourage imports, and anti-dumping laws designed to protect domestic industries from foreign take-over or competition.
Governments often call managed international trade agreements "free trade", and although this is not really free trade, such treaties may result in freer trade.
Free trade is a term in economics and government that includes:
trade of goods without taxes (including tariffs) or other trade barriers (e.g., quotas on imports or subsidies for producers)
trade in services without taxes or other trade barriers
The absence of trade-distorting policies (such as taxes, subsidies, regulations or laws) that give some firms, households or factors of production an advantage over others
Free access to markets
Free access to market information
Inability of firms to distort markets through government-imposed monopoly or oligopoly power
The free movement of labor between and within countries
The free movement of capital between and within countries
3. Taxation
The immediate effects of a tax cut are, generally, a decrease in the real income of the government and an increase in the real income of those whose tax rate has been lowered. In the longer term, however, the effect on government income may be reversed, depending on the response that tax-payers make. Depending on the original tax rate, tax cuts may provide individuals and corporations with an incentive for investments which stimulate so much economic activity that even at the lower rate more net tax revenue will be collected.[citation needed]
The longer term macroeconomic effects of a tax cut are not predictable in general, because they depend on how the taxpayers use their additional income and how the government adjusts to its reduced income. Three idealised scenarios can be hypothesised:
[glow=red,2,300]a. Cutting Spenditure, Increasing Taxes[/glow]
Government cuts its expenditure, and taxpayers increase theirs, spending the money on commodities sourced from within the country. This combination is macroeconomically neutral, but advocates of a free-market economy argue that it improves economic welfare, since people are more accurate than the government in spending money on commodities that they actually want.
b. Maintaing Spenditure, Increasing taxes
Government maintains its expenditure (thus incurring debt), and taxpayers increase theirs, spending the money on commodities sourced from within the country. This combination provides a stimulus to the economy, and it is on these grounds that advocates of supply-side economics frequently argue for tax cuts. It should lead to economic growth, bringing about greater general prosperity, though unless managed carefully it will also lead to inflation. A government making tax cuts and incurring debt usually hopes that the economic stimulus of the tax cut will be large enough to produce a long-term increase in tax revenues, allowing the debt to be paid off in the future. If that does not occur then the government can be left with a severe budgetary crisis.
[glow=red,2,300]c. No Tax Increase, Steady Government Spenditure [/glow] (PRIMARY!)
Government maintains its expenditure (thus incurring debt), and taxpayers either save their increased income or spend it on commodities sourced from outside the country. This combination is not inherently deflationary, but it contributes to balance of payments difficulties which may have secondary deflationary effects and as noted above may lead to a government budgetary crisis with a painful readjustment to follow