Response one PADM-05   Mortgage interest rates are expected to rise considerably in 2018. If the economy grows too fast, The Federal Reserve will have to raise interest rates faster than expected. That could make borrowing money more expensive. If that happens, the likelihood of a recession increases. Not only would this drive up interest rates, but reduce private sector investments and diminish the country's creditworthiness. When inflation is too low, it can hurt the economy. Businesses get queasy about investing in people and equipment. If prices don't rise, wages don't either. But out-of-control inflation can also be harmful. As I see it, the current fiscal path is unsustainable. The Republican tax cuts could not come at a worse time, and I think it will hasten inflation and prematurely bring a recession.      The effectiveness of mortgage interest rates rising is in my opinion, is nonexistent. It is like a dog chasing its own tail. With the passage of the tax reform bill, which essentially lowered the income tax rate, the Federal Reserve raised or is raising mortgage interest rates. So, this essentially takes the money that was saved by paying lower income tax and essentially puts it toward paying the cost associated with a higher mortgage. True, not everyone owns a home. But if you plan to buy one, this will make it considerably more expensive. The efficiency of raising mortgage interest rates is has both equal value and detriment. Keeping mortgage rates low allows more people to afford housing, stimulating the economy. By raising interest rates, the cost of owning a home is more and less people purchase homes, which is a key sign of inflation. Either way, I believe the policy on raising or lowering mortgage interest rates is ethical - the entire point is to maintain a healthy, balanced economy. The equity, or measure of fairness, depends largely on who stands to gain the most. In the case of our current economy, it's without question that that the restructuring of our tax code largely benefits the ultra wealthy. Had the entire country benefited equally from the tax reforms, then it would have been more equitable. The 2018 tax reform brought little political feasibility, as both political parties were at opposite ends of the restructure. Nonetheless, a compromise was reached. There was little social acceptability or public acceptance from this policy change, and many will end up paying considerably more tax because of it. I believe the administrative feasibility caught citizens off guard. I knew little to nothing of the tax reform until it actually happened. Whatever the case, the government reluctantly came together and enacted the policy. I do not know how technical feasibility plays into all of this, but I could only assume that the Federal Reserve had considerable reservations about the policy due to the fact that inflation will likely rise and mortgage interest rates will go up just because of it. Links: https://www.express.co.uk/ ...

1. Response one PADM-05
Mortgage interest rates are expected to rise considerably in
2018. If the economy grows too fast, The Federal Reserve will
have to raise interest rates faster than expected. That could
make borrowing money more expensive. If that happens, the
likelihood of a recession increases. Not only would this drive
up interest rates, but reduce private sector investments and
diminish the country's creditworthiness. When inflation is too
low, it can hurt the economy. Businesses get queasy about
investing in people and equipment. If prices don't rise, wages
don't either. But out-of-control inflation can also be harmful. As
I see it, the current fiscal path is unsustainable. The Republican
tax cuts could not come at a worse time, and I think it will
hasten inflation and prematurely bring a recession.
The effectiveness of mortgage interest rates rising is in my
opinion, is nonexistent. It is like a dog chasing its own
tail. With the passage of the tax reform bill, which essentially
lowered the income tax rate, the Federal Reserve raised or is
raising mortgage interest rates. So, this essentially takes the
money that was saved by paying lower income tax and
essentially puts it toward paying the cost associated with a
higher mortgage. True, not everyone owns a home. But if you
plan to buy one, this will make it considerably more expensive.
The efficiency of raising mortgage interest rates is has both
equal value and detriment. Keeping mortgage rates low allows
more people to afford housing, stimulating the economy. By
raising interest rates, the cost of owning a home is more and
less people purchase homes, which is a key sign of inflation.
Either way, I believe the policy on raising or lowering mortgage
interest rates is ethical - the entire point is to maintain a
healthy, balanced economy. The equity, or measure of fairness,
depends largely on who stands to gain the most. In the case of
our current economy, it's without question that that the
restructuring of our tax code largely benefits the ultra wealthy.

2. Had the entire country benefited equally from the tax reforms,
then it would have been more equitable. The 2018 tax reform
brought little political feasibility, as both political parties were
at opposite ends of the restructure. Nonetheless, a compromise
was reached. There was little social acceptability or public
acceptance from this policy change, and many will end up
paying considerably more tax because of it. I believe the
administrative feasibility caught citizens off guard. I knew little
to nothing of the tax reform until it actually happened.
Whatever the case, the government reluctantly came together
and enacted the policy. I do not know how technical feasibility
plays into all of this, but I could only assume that the Federal
Reserve had considerable reservations about the policy due to
the fact that inflation will likely rise and mortgage interest rates
will go up just because of it.
Links: https://www.express.co.uk/finance/city/902886/world-
bank-inflation-interest-western-countries-economic-growth
http://www.telegraph.co.uk/business/2018/01/09/global-
economy-set-decade-gloom-world-bank-predicts-recovery/
References
Shapiro, R. (2017). Trump in 2018: What happens when the
next recession hits?. Washington: Brookings Institution Press.
Retrieved from https://search-proquest-
com.ezproxy2.apus.edu/docview/1982588319?accountid=8289
Phil's stock world: EconMatters expects global recession by
2018 (video) (2016). . Chatham: Newstex. Retrieved from
https://search-proquest-
com.ezproxy2.apus.edu/docview/1823224390?accountid=8289
Clifford, H. (2017, 07). Preparing for the 2018
recession. Residential Systems, 18, 14-14,4. Retrieved from
https://search-proquest-
com.ezproxy2.apus.edu/docview/1931239402?accountid=8289
Response two PADM-05
The federal minimum wage was put into law with the Fair Labor

3. Standards Act of 1938 following a long struggle between
progressive politicians, labor activists, conservative politicians,
and the courts. The law called for a minimum wage of 40 cents
per hour, a maximum work week of 44 hours, and also
contained a ban on most child-labor (Grossman, 2017). The
Cornell Law School- Legal Information Institute narrowly
defined the purpose of the original minimum wage as to
“stabilize the post-depression economy and protect the workers
in the labor force.” However, it would be wrong to leave the
purpose at that narrow definition. Presidents Clinton and
Obama both tied the concept of a minimum wage to an idea of
human dignity, both outside of the workplace through bringing
in a respectable income, and inside the workplace, to establish
some minimum level of equity in dignity and respect between
coworkers. President Obama declared that the lack of a
minimum wage was a violation of the American social pact that
if an individual works hard, they can succeed (Rogers,
2014). For our purposes here, a somewhat muddy middle
ground encompassing human dignity and achieving a basic
standard of living should suffice as a purpose.
The minimum wage is not efficient. As an artificial economic
mandate on the price of labor it obscures the actual value of
labor that has a multitude of negative effects on the
market. This hampers economic growth that would help to
improve wages under the correct conditions. The minimum
wage destroys jobs in areas stricken by poverty as small
business owners cannot afford to purchase labor. The minimum
wage additionally harms young, low-skill workers as it makes it
unprofitable for businesses to hire and train them because those
workers simply are not worth the (current) $7.25 an hour. The
unpaid internships that we currently see college students taking
to gain workplace experience are largely a result of this
dynamic (Lee, 2014). There are certainly more efficient ways
for the government to ensure a basic standard of living.
The minimum wage is social and culturally feasible while
removing it is not. Lee elaborates two separate types of

4. moralities in his piece on the minimum wage: The magnanimous
morality and the mundane morality. The magnanimous morality
is the kind of morality and ethic displayed towards people
whom we know. It is kind. It is generous. Mundane morality
is the set of general principles we all abide by with people we
do not know: property rights, privacy, etc. (Lee, 2014). The
long-standing place that minimum wage holds in our social
consciousness has caused us to view it in terms of magnanimous
morality even though, as a system, we might have better results
if we viewed it via the mundane morality lens.
The minimum wage is ethical in-so-far as any government
mandate is ethical. It is applied evenly (with few exceptions)
and it is clearly meant for the betterment of people’s
lives. Harm to business interests may be unintended, but not to
the extent of negligence. Lower income levels are associated
with higher rates of infant mortality and low birth weight
(Komro et. Al, 2016). Should the minimum wage be revoked
without any kind of replacement, many people would certainly
fall into poverty, certainly. Both of these facts make a strong
argument that revocation of the minimum wage is unethical.
There are alternatives, however. Economics scholar Daniel
Shaviro advocates eliminating the minimum wage and allowing
low-wage earners to have a ‘negative income tax’’ (Rogers,
2014). A new idea that is gaining some traction around the
world is the concept of a basic universal income. In this model,
the government simply pays everyone, regardless of
employment a set amount of money over a set period of
time. Both of these are possible alternatives to the minimum
wage.
Cornell Law School- Legal Information Institute – Minimum
Wage. Retrieved
from: https://www.law.cornell.edu/wex/minimum_wage January
30, 2018.
Grossman, J (2017). Fair Labor Standards Act of 1938:
Maximum Struggle for a Minimum Wage. Dept of

5. Labor. Retrieved
from: https://www.dol.gov/general/aboutdol/history/flsa1938
Fair Labor Standards Act of 1938: Maximum Struggle for a
Minimum Wage
Komro, K. A., Livingston, M. D., Markowitz, S., & Wagenaar,
A. C. (2016). The Effect of an Increased Minimum Wage on
Infant Mortality and Birth Weight. American Journal Of Public
Health, 106(8), 1514-1516. doi:10.2105/AJPH.2016.303268
LEE, D. R. (2014). The Two Moralities of the Minimum
Wage. Independent Review, 19(1), 37-46.
Rogers, B. (2014). Justice at Work: Minimum Wage Laws and
Social Equality. Texas Law Review, 92(6), 1543-1598.
Response PADM-pol-05
The U.S. economic policy that I chose to analyze is taxation,
more specifically, how marginal tax rates are determined. At
the most basic level taxes are “what we pay for a civilized
society” (U.S. Department of the Treasury, 2018). Taxes are
revenue that pays for government services such as national
defense, infrastructure, and programs like social security,
Medicaid, and other safety net programs. Tax laws are enacted
at the federal, local, and state level. There are also several
different kinds of taxes, the most common is the federal income
tax which funds roughly 33% of all annual government
expenditures (Amadeo, 2017). While there are a great many
policies that make up federal, state, and local taxation and fiscal
policy in general, I will focus on how federal income tax rates
are determined. The overall goal of maintaining a healthy
economy is achieved by finding a balance between tax rates and
public spending (Heakal, 2018). Fiscal policy is used to
stimulate sluggish economies by decreasing tax rates, increasing
consumer spending money, and increasing government spending
by buying services like infrastructure repair. This type of
government spending creates jobs and wages that in turn
stimulate the economy through consumer purchases (Heakal,
2018). Fiscal policy can also be used to increase taxes in order
to curb inflation, this also involves decreasing government

6. spending and the amount of money in circulation (Heakal,
2018).
In my analysis of how federal income tax rates are determined, I
will look at equity, social acceptability, and ethics using current
marginal tax rates. With a framework of how taxes are used and
how they effect the economy as a whole in mind, the equity and
ethics of marginal taxation rates can be determined. Income
taxes at the most basic level are determined by the amount of
income generated during a tax year, brackets with a set
percentage are assigned to certain levels of income, resulting in
the marginal tax rate. The marginal tax rate is the amount of
tax paid on an additional dollar of income, and will increase as
income rises. This method of taxation aims to fairly tax
individuals based upon their earnings; the lower the income, the
lower the tax rate (Investopedia, 2017). I’ll use the 2016
marginal tax brackets, for taxes due in 2017 as an example:
15% Bracket: $9,275 to $37,650
25% Bracket: $37,650 to $91,150
28% Bracket: $91,150 to $190,150
33% Bracket: $190,150 to $413,350
35% Bracket: $413,350 to $415,050
39.6% Bracket: $415,050+
The marginal tax system is designed to be equitable. Another
example of tax policy equity is how a moderate increase in
income, enough to move just into the next tax bracket, is
calculated. “When an increase in income pushes you into a
higher tax bracket, you only pay the higher tax rate on the
portion of your income that exceeds the income threshold for
the next-highest tax bracket” (Investopedia, 2014). Take this
example from Investopedia:
“Your annual salary increases from $36,000 to $38,000. Your
previous tax rate was 15% or $5400. Many people incorrectly
think that whereas they previously paid a tax of 15% of
$36,000, or $5,400, leaving them with $30,600 in take-home
pay, after their salary increase and tax bracket change, they will
pay a tax of 25% on $38,000, or $9,500, leaving them with

7. $28,500 in take-home pay.
However, you pay different tax rates on different portions of
your income. The first dollars you earn are taxed at the lowest
rate, and the last dollars you earn are taxed at the highest rate.
In this case, you paid a 10% tax on the first $9,075 you earned
($907.50). On the remaining $22,975 of income ($32,050 –
$9,075), you were paying a 15% tax ($3.446.25). Your total tax
was $4,353.75, not $5,400. While your marginal tax rate was
15%, your effective tax rate was lower, at 12%
($4,353.75/$36,000).”
Two other important factors that help determine marginal tax
rate are exemptions or tax breaks and filing status, which help
determine how much of your income is taxable. Filing status
takes into account factors like how many people you support,
how many incomes you have, and help determine how much tax
you are responsible for.
Where the ethics and equity of the marginal tax rate tends to
break down, is at the highest income levels. The Washington
Post posits that a “Premium placed on tax efficiency tends to
favor the rich.” One of the roles of the federal income tax is to
redistribute wealth from the well-off to the poor by using taxes
to finance programs like welfare, food-stamps, and low-income
housing (Kilborn, 1988). The social acceptability of this
concept varies, and it is closely tied to both ethics and equity.
Some argue that those who use programs or services the most,
should shoulder most of the burden of cost to maintain them.
However, in the case of social programs they are utilized the
most by those who have the lowest ability to pay. The ability to
pay is another core concept in the tax equity argument. The
ability to pay principle can be summed up like this: “It is fair
for people to pay taxes based on their capability to handle the
financial burden. Progressive taxes, such as the individual
income tax system in the United States, are based on the ability-
to-pay principle. A progressive tax is a tax for which high-
income taxpayers pay a larger percentage of their income than
do low-income taxpayers. The U.S. individual income tax

8. structure is based on income minus deductions, and the marginal
tax rate rises as income rises” (Buck, 1970). It would be both
unethical and inefficient to ask a low-income family to pay
$1000 in taxes towards programs that they utilize because they
cannot afford the necessities of life, this transfer in no way
increases their net income (Buck, 1970). Returning to social
acceptability, it is closely tied to equity and the perception of
fairness. Different tax payers may have differing ideas of what
is fair, using income taxes to provide a social safety net may
not be perceived as fair to higher income earners who fund
social programs but do not utilize them. This argument is often
a political one. There are differing ideas among policymakers
about the extent of aid that should be provided by the
government and how taxes should be used to fund that aid.
These ideas often impact whether or not income tax rates and
their uses are perceived as equitable, ethical, efficient, and
socially acceptable.
References:
U.S. Department of the Treasury. (n.d.). Retrieved January 31,
2018, from https://www.treasury.gov/resource-
center/faqs/Taxes/Pages/taxes-society.aspx
Amadeo, K. (2017, December). Why Do We Have to Pay Taxes?
Retrieved January 31, 2018,
from https://www.thebalance.com/why-do-we-pay-taxes-
4067684
Heakal, R. (2018, January 11). What is Fiscal Policy? Retrieved
January 31, 2018,
from https://www.investopedia.com/insights/what-is-fiscal-
policy/
Staff, I. (2017, February 16). Marginal Tax Rate. Retrieved
January 31, 2018,
from https://www.investopedia.com/terms/m/marginaltaxrate.as
p
Kilborn, P. T. (1988, December 09). Tax System: Efficiency vs.
Fairness. Retrieved January 31, 2018,

9. from http://www.nytimes.com/1988/12/10/business/tax-system-
efficiency-vs-fairness.html?pagewanted=all
Buck, J. (1970, January 01). Economic Perspectives. Retrieved
January 31, 2018, from
http://econperspectives.blogspot.com/2008/12/equity-of-tax-
system.html
Response for PADMl-05
For my week five forum I decided to provide an analysis on the
minimum wage issue in America. Of course as we all know this
has been a hot button topic in our society and one that does not
seem as if it is going away anytime soon. First and foremost the
cost and benefit of raising the minimum wage for the poorest
Americans has gone on for years. (Kurtzleben, 2013). As
American citizens this is a topic that we ponder on because of
our American value system and looking out for our fellow man
and woman. Analyzing some numbers 7.25 an hour at 40 hours
a week would earn $15,100 per year, while increasing to $9.00
per year would average out to be around 18,700
yearly(Kurtzleben, 2013). Using this argument we must keep in
mind the spending trends of less fortunate Americans versus
those that are well of. Americans with less money tend to spend
more money on everyday items such as necessities that more
well of Americans. African Americans spend trillions of dollars
clothes, shoes, and other items where some more well of may
spend money on these items but have the resources to do so.
Poor Americans spend extra money readily than higher earners
for items such toothpaste and other necessities (Kurtzleben,
2013). So will increasing the minimum wage provide more
money but not address financial literacy? There is also the
aspect of a rise in unemployment as employers being forced to
higher fewer workers due to the increase in the minimum wage
(Kurtzleben, 2013).
Policy Framework
When analyzing the effectiveness of a proposed policy
let’s take a look at what effect increasing the minimum wage
would have on the economy, the increase in economic activity

10. and job growth. The Economic Policy Institute studied how a
rate increase to 7.25 an hour 10.10 an hour would pump 22.1
billion dollars into the economy and create 85,000 new jobs
(ProCon, 2018). In addition as we read in regard to the federal
reserve bank they back this information by announcing that a
1.75 increase in income would increase household spending by
48 million(ProCon, 2008). Efficiency can be addressed as
higher minimum range would reduce government welfare
spending (ProCom, 2008). The logic here is that low income
individuals look less toward the government for benefits, but
take pride in providing for their family. The Center for
American Progress reported in 2014 that raising the minimum
wage by 6% to 10.10 dollars would reduce spending on the
Supplemental Nutrition Program by 6 percent or 4.6
billion(ProCon, 2008). As it relates to equity within the policy
framework the Organization for Economic Cooperation and
Development emphasizes The United States has one of the
highest levels of income inequality.(ProCon, 2008). As a
civilized country with so many resources to go around it seems
unimaginable that we would be on such a list. Equity is one of
the key elements of political framework. The success of the
whole equals the success of the nation. In 2012 the richest
1percent of the U.S. population earned 22.83 percent of the
nation’s total pretax income resulting in the widest gap between
the rich and the poor since the 1920’s (ProCon, 2008) Social
Feasibility which is a measurement of public acceptance of a
proposed policy increasing the minimum wage would increase
worker productivity and reduce employee turnover. There are
two issues that run parallel here, the more wages increase
equals increase in productivity (ProCon, 2018). In 2014 Alan
Manning a professor at the London School of Economics
summarized that when the minimum wage rises and work
becomes more attractive, labor turnover rate and absenteeism
tend to decline (ProCon 2008). These are not hard concepts but
to put them into action takes a determined leader and detailed
studies. . Administrative feasibility which is the ability to

11. implement a proposed policy stands a lot to gain from an
administrative standpoint. Raising the minimum wage would
increase school attendance and decrease high school dropout
Arates (ProCon, 2008). In a 2014 California Study the
minimum wage was raised to 13 dollars which increased
incomes for families by 7.5 million dollars meaning fewer
children in poverty the study goes on to prove that children in
poverty miss more school time so by increasing the minimum
wage would mean fewer days of school missed by
children(ProCon, 2018). This study should give the
administrative feasibility a huge boost when it comes to our
futures which are our kids. As we look at ethics within the
political framework which deals with cultural norms we could
change the norm to a new normal. According to ProCon.org
increasing the minimum wage would reduce poverty (PrpCcon,
2008). What bigger ethical achievement is there than having the
ability to reduce poverty in a wealthy country such as the
United States of America? The 2014 Congressional Budget
office reported increasing the minimum wage to 9 dollar would
lift 300,000 people out pf poverty, and an increase to 10.10
dollars would lift 900,000 people out of poverty (ProCon,
2018). These are staggering numbers yet achievable but what
will we do. Finally Political Feasibility would be a dream for a
politician to increase the minimum wage and promote a
healthier population and prevent premature deaths. A 2014
Human Impact Partners study by Rajiv Bhatia MD found by
raising California minimum wage to 13 dollars by 2017 would
benefit the health those earning more, they would have enough
to eat, exercise, and less likely to suffer from emotional and
psychological problems preventing 389 premature deaths a
year(ProCon,2008).
Incorporating the minimum wage within the political framework
provided insight I did not know and even some I believe could
work with studies to back them up. I just wonder will we see
real change in the politics of it all.

12. References
ProCon Orgranization (2018). The Leading Source for Pros and
Cons. Retrieved From
https://minimum-wage.procon.org/
Kurtzleben, D. (2013). America’s Complicated Minimum Wage
Argument. Retrieved From
https://www.usnews.com/news/articles/2013/02/15/americas-
complicated-minimum- wage-argument