Sue Goodrich

Econ 2020
Dec 9,2017

Who Rules America

Chapter 13 of Macroeconomics, opens with the formation of the Council of Economic

Advisors (CEA). The 3 advisors are appointed by the president. That information alone is

telling in that the president will most likely appoint individuals that are like minded with his

views. The CEA advised the federal government on changes to improve the Nations economy

through government spending and taxes.

The government is currently working on passing a tax policy for 2017. We are watching

firsthand, how this process works. The benefits of the proposed tax changes are purely opinion

at this point, but the largest tax reductions are for businesses. Some believe that this money

saved in the business world, will be invested back into the people in higher wages and business

expansions, which will increase jobs and increase spending in the economy. Many others

believe that the profits will be kept by the business owners and stockholders, making the rich

richer, with no benefits to the average worker. There is also the belief that any potential

increases in wage will be consumed by health care costs. In the past Congress had a federal

health care plan which lead to the opinion that they had no stake in the components of the

Affordable Care Act (Obamacare). As of 2014 that changed, and members of Congress were

only allowed to select their health care through the Health Insurance Exchange, under

Obamacare. The significant advantage is that members of Congress and many other federal

employees, have significantly higher incomes that the average American, and can afford to

choose higher cost health plans if needed.

 Tax cuts for businesses are a prime example of the public be damned. The wealthy and

elite in the government are making decisions that benefit those that contribute, or have the

potential to contribute, the most to their campaigns. Political parties stick together in the

approval process of tax reform proposals, health care reform, even offering public support for the

reduction of national monuments in Utah. Representative Jason Chaffetz (also chairman of the

United States House Committee on Oversight and Government Reform), Senator Orin Hatch,

and Governor Gary Herbert, have all favored their parties over the voice of their constituents.

Chapter 13 text also notes that the bulk of the public debt is owned by the wealthy.

Government securities; Treasury bills, Treasury notes, and bonds are sold to fund excess

government expenditure. Interest earned on the government securities is paid to the holders

which transfers incomes to the wealthy bond holders. Majority ownership of the public debt is

another reason behind the theory that the wealthy have the ability to sway the decisions of the

government.

The United States money and banking system is controlled by the Board of Governors of

the Federal Reserve System, which consists of 7 board members, serving staggered terms of 14

years. Based on the length of terms served, the board contains a wealth of experience and

independence from political party pressures. The Federal Open Market Committee (FOMC)

consists of 7 members of the Board of Governors, the president of the New York Federal

Reserve Bank, and 4 revolving members of the Federal Reserve Banks, directs the purchase and

sale of government securities. This group controls the money supply and affects interest rates.

While the banking system is not controlled by any political party, the wealthy still benefit the

most when they purchase government securities are purchased, interest payments rise, and the

reserves increase at the Fed, which in turn increases lending for business growth.
 I believe that the current presidency is a perfect example of what happens when the

wealthy are in control of the country and the government. The 2016 election was proof that big

business backs their own as many executives of major corporations voiced their opinions and

make large campaign donations. We have a string of business executives that who have been

appointed to the presidents Cabinet, many without any experience in the area that they now

head. Many decisions are being made to the benefit of the business world and the ordinary

citizen is being overlooked. The proposed tax plan reflects reductions in business taxes based on

the theory of trickle-down economics, which had not actually been proven to be effective.

Interest on student loans may no longer be deductible on income taxes, affecting lower income

students and younger professionals entering the work force. The wealthy and elite do not need

student loans showing again that the average citizen is bearing the greater tax burden based, on

the percentage of their income.

Voting has been historically low within lower income groups. I believe this comes from

a lack of education about our government policies, difficulty leaving an hourly pay job in order

to vote, and the overall feeling that their vote will not make a difference. Many potential voters,

believe that voting is a waste of their time due to the fact the U.S. presidential election is

determined by the electoral college, and not individual vote. Unique to the 2016 election, low

income voters came out in greater numbers to vote for promises of better financial lives, and an

improved job market. Many of these promises have yet to be realized, leading to frustration with

the current system and tension within the country.

The average U.S. citizen is beginning to find their voice and speak out against what they

believe is wrong. I am both hopeful and curious to see if the new leadership and proposed

changes, will actually bring economic growth and prosperity to the United States. I believe that
American citizens have a renewed interest in our political system and the effect it has on our

country. I also hope that these new experiences will lead to improvements in the current election

system and increase the desire for all citizens to vote and have a voice in our future.