Business and Economics Discussion: Pollution, Pavements Construction, Budget Balancing

Situation1: Pollution

Environmental pollution is defined as the unpleasant changes in the biological, physical and chemical qualities of air, water and land caused by the increased industrial activities and population outburst. Industrial processes result in either positive or negative externalities. An externality is the situation when the benefits obtained from utilization of a service and a good, or the cost of its production spills over to people or parties not involved in the manufacturing or consumption. The externality is negative when it has a cost or a negative effect for the society, such as the case of the cement firm that releases heavy metals into the river. The externality is positive when the benefits are enjoyed by the parties affected indirectly and may be in the form of provision of healthcare, high wages to the workers, etc.

In order to counteract the industrial pollution menace, the policy makers must set a fine paid for pollution that exceeds the currently defined levels. The firm can be made to clean up pollution by determining the marginal cost of benefit and pollution control. Thus, the tax fine is set to meet the marginal cost of environmental pollution. In order to achieve some level of pollution abatement, the introduction of tradable permit policy or an emission tax to the firms that take part in water pollution is a certain method (Jha et al., 2010). Due to the difficulties in estimating the efficient marginal cost of pollution control, the use of pollution permits is a method alternative to taxes.

The two approaches aim to achieve high positive externalities. The government should reduce the cost of production by providing subsidies and grants to companies that produce the goods and services (Kim, 2014). The state must strive to discourage and reduce the negative externalities to attain efficiency in the allocation and distribution of scarce resources for the benefit of the society. Moreover, by encouraging positive externalities, the government will strike a balance in the economy driven by industrial activities.

Situation 2: Free University Education

Education is a fundamental human requirement. Numerous researches indicate that in addition to better individual performance at work, education promotes the active and respectful citizenship, decreases violence, and improves nation’s health. Life expectancy is associated with the level of education; therefore, it is anticipated that most of the educated people live longer. The state with free university education that allows most of its residents to acquire university education has an upward social mobility. The residents have good health, minimal conflict with the law, long life expectancy and improved overall performance at work.

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However, the effect of the program is skewed as confirmed by some states. Development is concerned with introducing changes in the entire society that enable to attain human potential. The quality of development that is concerned with affecting larger society is missing in the free university tuition policy. The result is excellence in job performance and improved social status for the states implementing the policy. The regions with the policy could have more human power than the labor market can absorb due to the high number of graduates. Transfer of skilled personnel to the states that did not introduce the policy is possible to take place. For the whole nation to experience upward social mobility, the government must enforce the policy in every state so that the benefits that come as a result of its implementation are realized across the country.

Through the efficient allocation of resources, the central government can ensure that every state-funded university provides free tuition. Thus, the number of graduates is evenly distributed across the whole country. The action would ensure that high efficiency in work, overall good health, law obedience, and civic engagement is achieved in the entire country. The strategy applied around the country is able to unleash the full potential, as opposed to the case with just a few states participating in the program.

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Situation 3: Pavements Construction

Accessibility to a home is as essential and critical as the home itself. The responsibility of ensuring that residents are comfortable is normally vested on the local authorities. Some residents in the subdivision are located in remote areas; thus; they can miss the attention of the local authorities. The residents have to mobilize to create roads and other social amenities that would make sure the community does not face problems in their daily activities.

As much as the residents have a social responsibility to create pavements that they use, Bob does not have a social or moral ground to finance the construction of the pavements and demand refund from the fellow residents. The action may amount to exploitation of the locals as he does not define the period for collecting the money, and the parameters he uses to set the charged amount might remain unknown. It is acceptable for Bob to finance the pavements construction on the philanthropy basis. Thus, he will help the residents out of good will to improve their living standards.

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The residents are justified to refuse the initiatives like one proposed by Bob. People living in the subdivision are entitled to enjoy services from their central and local governments or authorities. The services include the provision of healthcare, road networks, security and many other opportunities. It is the function of the government to offer services to its people and collect taxes from them to finance and facilitate its operation. People like Bob may have two options to recover their money; talk to the government about the pavement project they have funded and ask for a possible refund. The second way is to clarify the government before incurring the expenses so that the authorities are aware of the plans to ease the process of refund or do it as philanthropists who want to benefit the whole society. 

Situation 4: Budget Balancing

Governments have a social and legal responsibility to provide security on both internal and external levels. They must protect their citizens from external invasion, maintain law and order to create an environment that attracts investors to contribute to the growth of the countries’ economy. The United States President is not justifiable to ask the public to voluntarily pay for the cost to maintain or enhance national defense. The function is a primary duty for a government and is normally funded by the taxes collected from the citizens.

The president should take heed of the advice that informs him of the impossibility of similar decision’s feasibility. He must realize that it is morally wrong to impose double taxes to the people in a country. Paying for the cost to maintain national defense is equivalent to double taxing the class of willing people. Whether or not the cost of national defense becomes expensive, people should not directly help the government to provide essential services other than through the taxes. The US government must look into alternative means to reduce the cost or balance the budget. Increasing taxes would not work since it is counterproductive. In fact, it reduces economic growth and encourages excess federal spending (Rubin, 2002).

The best ways the US President can balance the budget and reduce the cost is through reduction of budgetary allocation for the defense department and reduction of the size of the US military to cut cost. Another option is to propose reforms to the medical care programs to check the increase in the prices and expenditure for the medical services. Reforms in the Social Security System that do not affect the benefits of the retirees but reduces expenditures would also contribute to the balance of the budget.

Conclusion

Industrial pollution menace solution requires the policy makers to set a tax in the form of a fine paid for pollution that goes beyond some defined levels. The firm can be made to reduce the pollution by determining the marginal cost of benefit and pollution control so that the tax fine is set to the marginal cost of environmental pollution. The introduction of tradable permit policy or an emission tax to the firms that take part in water pollution is a sure method for a positive outcome in abating pollution.

Efficient allocation of resources by the federal government can ensure that every state-funded university provides free tuition. The policy would ensure that the number of graduates is evenly distributed across the whole country. The states would enjoy high efficiency in work, overall good health, law obedience, and civic engagement in the entire country and not in the selected states. The improvements are the catalysts for rapid upward social mobility.

People living in the subdivision are entitled to enjoy services from their central and local governments or authorities. The services include the provision of healthcare, road networks, security, etc. The government is mandated by the law to offer facilities to its people and collect taxes from them to finance and facilitate its operation. The residents are justified to refuse the initiatives like one provided by Bob. Allowing the similar enterprises would encourage hooliganism in residents’ division where anyone can introduce a project and illegally extort funds from the public without government knowledge.

The United States President can balance the budget and reduce the cost through reduction of budgetary allocation for the defense department and decrease the size of the US military to cut the cost. The reforms to the medical care programs to check the increase in the prices and expenditure for the medical services also contributes to the lower taxes. The Social Security System must undergo reforms that do not affect the benefits of the retirees but reduces expenditures. The reforms would enable the President to substantially reduce cost and balance the budget.

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