University:
Bradley University
Course:
ECO 199 | Foundational Topics in Economics
Academic year:

2024
Views:

276

Pages:

14
Author:

Remington Spence

Economics Chapter 3 Section 4: Providing a Safety Net The Poverty Problem • The poverty threshold is a relative figure determined by the federal government & adjusted periodically –2009- single parent under 65 with 1 kid, $14,570 –4 person family $22,050 The Government’s Role • Government tries to provide a safety net to the very young, very old, sick, poor, & disabled –Government programs help to raise people’s standard of living The Welfare System • Began under FDR • Critics voiced increasing concern about people becoming dependent on welfare & being unable or unwilling to get off it –Income redistribution discourages productivity, aggravating poverty Redistribution Programs • Income data are gathered by the U.S. Bureau of the Census –Conducts monthly surveys of households to track key economic data- then estimates how many people are living in poverty • Cash Transfers –Temporary Assistance for Needy Families (TANF) • Discontinues direct federal welfare payments to recipients –Federal money goes to the states, which design & run their own welfare programs • States must adhere to federal rules that create work incentives & establish a lifetime limit for benefits • Program aims to move people from welfare dependence to the workforce • Social Security –Created in 1935 –Provides cash transfers of retirement income to the elderly & living expenses to disabled Americans –Program collects payroll taxes from current workers & then redistributes that money to current recipients • Unemployment Insurance –Funded by state & federal government –Provide money to eligible workers who lost their jobs –Workers must show that they have made efforts to get work during each week that they receive benefits • Workers’ Compensation –Provides a cash transfer of state funds to workers injured on the job –Most employers must pay workers’ compensation insurance to cover any future claims their employees might make • In- Kind Benefits –Most common are food giveaways, food stamps, subsidized housing, & legal aid • Medical Benefits –For elderly, disabled, & poor –Medicare covers Americans over 65 as well as disabled –Medicaid covers some poor people who are unemployed or not covered by their employer’s insurance –Administered under Social Security • Education –Federal government funds from preschool to college –State & local program aids students with learning disabilities –Education programs add to the nation’s human capital & labor productivity • Faith Based Initiatives –Office of Faith Based & Community Initiatives to help faith based groups work more effectively with the federal government • Religious organizations have frequently been among the most successful groups delivering social services

Providing a Safety Net

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