President Roosevelt’s move of paying farmers During the great depression
During the great depression, President Roosevelt’s move of paying farmers to plant less tends to be a good policy. The primary reason for embracing this strategy was to reduce supply with an ambition of increasing demand. Farmers were suffering. They could work hard but end up selling their produce at a throw-away price, making them incur significant losses. It turns out that the policy worked well during the great depression since farmers were able to get relatively high returns from their produce. However, I believe this policy can only work better during an extreme downturn. On normal occasions, this policy can elicit hoarding, leading to the formation of cartels, which in the long run, may end up reaping more profits through exploiting consumers. Scarcity elicits demand, this policy by Roosevelt worked well, and it was among the several strategies that helped the United States battle the great depression.
Question 2
Policymakers are usually caught in limbo when they are trying to raise revenue while at the same time improving the welfare of the workers. The suggestion by the staff sounds convincing, but it is not viable in this capitalist country. Even the suggestion by the staff is implemented, the workers will still feel the burden when they buy their basic products in the long run. On several occasions, when firms realize that their payroll tax has been increases, they are usually left with no option but to raise the price of their commodities. Even if the payroll tax of workers has been reduced, they will face the horror when they go to the shelves and find that prices of products have doubled. It will mean that their welfare will be at a status quo, and hence the senator’s goal would not have been achieved.
Question 3
Most economists have turned out and supported ticket scalping. These policymakers have also urged the government to stop interfering with the secondary ticket market. I tend to agree with these economists because, at the end of the day, we are living in a capitalist country. Succinctly, scalpers are just like brokers between the ticket producers and the buyers. In fact, scalpers are risk-takers because they may end up selling tickets at lower prices than the buying price due to low demand. It, therefore, turns out that just like any other broker, scalping is a do or die game. Laws preventing scalping are irrational because, at the end of the day, scalping provides an interface for a mutually beneficial transaction. In extension, scalping can save a ticket producer a significant amount of money by cutting down on its advertising costs. At the end of it all, it is apparent that both the scalper, ticket producer, and a person attending an event will benefit.