The Safety Net

In most modern economies governments provide social programs to ensure a general welfare among citizens who are in poverty or who are unable to care for themselves. Economists will utilize a poverty threshold, or a number of dollars earned per year under a set amount, to determine who is eligible for services that are designed to assist those who are impoverished. Currently the poverty threshold in the United States for a family of 4 is approximately $23,000 per year. For those who earn less than the poverty threshold, services are typically available to combat malnutrition, disease, lack of shelter and etc. The services available from the government for those in poverty are considered in economics as a Safety Net.

There are several types of Safety Nets available in the United States today. The Welfare System is available to those who are in need. Commonly a hot political issue, welfare is available to take care of American citizens, as well as to keep crime down. Taxpayers contribute money to the government, which in turn pays out money to people who qualify for assistance.

There are other government Safety Net programs. Such programs include the Family Medical Leave - for Families with newborns and etc, Social Security - to provide cash payments to the elderly, Unemployment Insurance - for people who have lost their jobs to make ends meet temporarily, and Workers' Compensation Insurance - for those who are injured on the job and temporarily can not work. These programs are developed to assist people who are in need, during times of crisis.

The Public Sector

Government plays an important role in our everyday lives. Police officers, transportation infrastructure projects, schools, and military expenditures are all examples of how the government spends money. These types of expenditures are part of the public sector. The public sector operates when a government collects taxes and uses that revenue to fund public goods and services. For example, the government identifies a public need, which should be addressed, and uses its tax revenue to resolve that issue. Let us say that crime becomes a major issue in a small town in California. The government decides that it will use money from the public sector to hire two new police officers to provide a public law enforcement service. The two new police officers are able to reduce the crime rate, thereby addressing the public need.

Public sector expenditures are designed to address needs that are not able to be addressed by individual persons or businesses. No single person is going to pay for a high speed rail to Las Vegas. But on the other hand, a pool of small tax contributions from the population can generate an amount that can fund that project. The public is all entitled to use the high speed rail to Las Vegas, so this is an example of a public sector expenditure.

The government, at the local, state, and federal levels, are always making decisions about how to distribute the collected tax money. Representatives, Senators, Mayors, and Presidents negotiate this distribution through voting, lobbying, and compromising. When and if an agreement is made, then the tax money is distributed to its appropriate destinations, thus funding the public sector. Teachers, firefighters, prison guards, city workers and etc are all a part of the public sector; whereas business owners, farmers, and et cetera are a part of the private sector.

Lewis, Clark, Sacajawea & The Corps of Discovery

In 1803 the United States President Thomas Jefferson successfully negotiated the purchase of a large tract of land from France. The Louisiana Purchase came at a time when the French were facing difficulties in their Caribbean Territories and war with England. As a result, the land, which ranges from New Orleans in the South, across the Midwest and into the Rocky Mountains, was purchased at approximately $.03 an acre. After the purchase of such a large tract of land for the United States, President Jefferson sent a Corps of Discovery, led by Lewis and Clark, to explore the newly acquired territory.

In 1804 Lewis and Clark arrived at an outpost near where the Missouri River joins the Mississippi River. The plan was to follow the Missouri River west to attempt to find a water route out to the Pacific Ocean. The Americans at the time were aware that Native American tribes inhabited the area, but the Americans were not aware of the difficult terrain, specifically the Rocky Mountains, that blocked easy access to the Pacific Ocean. As a consequence, the journey for Lewis, Clark, Sacajawea and the Corps of Discovery was extremely difficult.

Lewis, Clark and the Corps of Discovery set out across the Great Plains. At the time the land was full of wild game. Buffalo and Bison herds numbered in the tens of thousands. Bears, coyotes, elk, and deer were abundant. Across the Great Plains the expedition had the opportunity to engage Native Americans, record the differing species of megafauna, and take account of plants and other scientific information found throughout the region. Eventually the expedition would encounter a more challenging experience as they pushed further to the west.

Upon reaching the more mountainous terrain to the west, the expedition encountered its first casualties and its first hostile encounters with Native Americans. The weather became more difficult as the altitude increased over the Rockies. Game became more scarce when the winter season started to settle in. At one point the entire expedition had to carry the canoes over cataracts and water falls. Alas, the expedition crossed the Rockies and entered the modern day Washington state region. A tribe of Native Americans called the Nez Perce were less hostile, which as a result, helped the expedition reach the shores of the Pacific Ocean. With the translation abilities and assistance of Sacajawea, a female Native American who accompanied the expedition, the Corps of Discovery successfully reached the Pacific Ocean.

After reaching the Pacific Ocean the expedition had to build a camp or fort to spend the winter before attempting a return trip. During the winter disease and malnutrition became a problem. By eating the available but limited protein sources that the land provided, and not having access to fruits, vegetables, and other sources of nutrition, members of the expedition had a difficult winter. The spring came around however, and the expedition prepared for the return trip.

The return trip began in the spring time. Once across the continental divide the expedition simply needed to follow the rivers east back to the Mississippi River. The collected journals and materials that were developed during the journey provided the United States government with a much more thorough understanding of the lands acquired in the Louisiana Purchase. Furthermore, trading relations with friendly Native Americans were established; whereas the identification of hostile and violent Native American tribes was also similarly produced. The journals of Lewis and Clark are still available for study today.

Macro and Micro Economics

The United States economy is the largest in the world. Approaching 350 million people, the United States population is reliant upon the economy, which consequently can affect the lives and fortunes of all its citizens. Furthermore, with the increasing ties between the international community i.e. globalization, the United States economy also affects hundreds of millions of foreigners as well. Economists in Washington D.C. are tasked with managing the economy for the public good. Although the United States economy is a Free Enterprise System, there are tools used by the government to manage economic growth. This division is called macroeconomics.

Economists evaluate the economy on differing levels. Macroeconomics is a division of the economics discipline that evaluates entire economies as a whole. For example, the approach taken by John Maynard Keynes, an English economist, in the 1930's, sought to explain why the economies of the English-speaking democracies entered a prolonged depression. The purpose of his study was to find the reasoning behind why the Great Depression occurred and how to avoid something similar in the future. Keynes' research and proposed policies operated at the macroeconomics level since it was focused on entire economies.

On the other hand, economics is divided into another discipline called microeconomics. Microeconomics seeks to define behavior at the individual consumer, household or family, and small business levels. For example, the study of how families in rural a community purchase meat products in the winter is an example of a study at the microeconomics level. Studying demand and supply in a business setting also is in the realm of microeconomics.

Both the study of macroeconomics and microeconomics gives economists an understanding of how best to manage economic activity at both levels for the public good and for profit. Macroeconomists uses tools such as the Gross Domestic Product, a total value of all goods and services produced in an economy in a given time period, and the business cycle, the growth and decline of an economy over a time period, to effectively manage policies which affect the economy overall. However, micro-economists will utilize figures such as local employment rates, production quotas relating to applied technologies, or advertising strategies to modify business practices to increase profitability. Both types of economic views are a study in how best to proceed in an economic system.

Free Enterprise

In the United States and most modern democratic nations the Free Enterprise System is used for economic activity. The Free Enterprise System can be best defined as the economic system that allows people to freely develop business ideas and to attempt to use those ideas to generate a profitable business. The Free Enterprise System encourages competition, which as a result, gives customers the opportunity to choose the best good or service for their needs. The competitive nature of the Free Enterprise System does not ensure success for all businesses, but this system does encourage innovation, competition, revenue for government policies, and a focus on the consumer.

The Free Enterprise System is based on the premise of profit motive. Businesses and individuals alike are motivated to acquire profit. As a result, businesses will operate as efficiently as possible along the production possibilities frontier. No business or individual is seeking to lose money intentionally. The consequence is that business operations are automatically streamlined because they are motivated to generate the highest possible profit.


For the Free Enterprise System to work efficiently there must be open opportunity. No businesses are restricted, within reason, in the United States. By having an open opportunity, businesses with new ideas, better pricing models, improved products, and innovative approaches are able to enter the market place because of open opportunity.

Because of the strong tradition of legal equality and open opportunity found in the United States today, business ideas are continually being entered into the marketplace. Imagine that only middle-aged white males were allowed to participate in business ventures. The available goods and services to a restricted and unequal marketplace would lack diversity, thus limiting the available choices for the consumer. By opening up the opportunities and providing legal equalities, all business ideas are tested in the marketplace, leaving only the most efficient goods and services for the consumer.

Tools such as the free contract and the right to voluntary exchange give the Free Enterprise System further advantages. Businesses and individuals in the Free Enterprise System are allowed to freely engage in contractual obligations without government interference. Furthermore, the right of voluntary exchange allows consumers to deny or accept goods or services. No one is required to buy anything from anyone, at anytime. You are free to choose which contracts to enter and you are free to refuse or accept a purchase or sale always.

The features found in the Free Enterprise System encourage economic growth in a variety of ways. The most fundamental aspects of the Free Enterprise System are the profit motive and the competitive nature of the laissez-faire economic model. When the economic system is free to operate, the consumer wins. By allowing open opportunity and legal equality, the consumer wins. Using free contracts and the right of voluntary exchange, the consumer wins. Thus, the focus of the Free Enterprise System is to provide an economic model that encourages successful business ventures and to guarantee that the consumer wins.

World War 2

Economic struggles around the world during the 1930's opened the door for tyrannical leaders to make promises to their respective people. These leaders created modern mechanized armies that were more capable than the world had ever witnessed. By 1939 the National Socialists (Nazis), led by Adolf Hitler, and the Japanese Empire, led by a military-industrial panel of leaders, had strengthened their positions within their regions. These nations would embark upon aggressive expansionist attitudes seeking to dominate other nations for their resources and territories. The Japanese had conquered much of northern China and the Korean Peninsula by the end of the 1930's. The Nazis invaded Poland and soon conquered most of Europe and North Africa. The Allies (England, France, Soviet Union and the United States) formed an un easy alliance to combat the Japanese and German aggression across the globe.

December 7, 1941 the Japanese attacked the United States at Pearl Harbor, Hawaii. The United States entered the war against both Nazi Germany and the Japanese Empire. In the South Pacific the United States Navy and Marine Corps, turned back the tide of victories against the Japanese at the Battle of Midway, Battle of Guadalcanal, and later the Battle of Iwo Jima. In North Africa and Western Europe, the United States was able to overcome the Nazi armies and free multiple nations from Hitler's grip. In 1945 the United States and its allies defeated and occupied Germany, thus ending the war in Europe.


The Pacific Theater dragged on however. With estimates of up to 1,000,000 casualties, the United States President Truman (Roosevelt had passed away by this point) made the decision not to invade Japan with the Marine Corps, but rather to utilize the newly developed Atomic Bomb. At Hiroshima and Nagasaki the United States used the only atomic weapons in combat ever against the Japanese. Fearing the destruction of the entire nation, the Japanese authority surrendered in late 1945 ending the war in the Pacific theater.

World War 2 was a global war that claimed approximately 50 million lives. The United States attempted to stay neutral in up until late 1941, but by the end of 1941 the Japanese attack at Pearl Harbor, Hawaii dragged the reluctant power into the conflict. With the atrocities occurring against the Jews and others in Europe by the Nazis and to help out its other allies, the United States joined in combat operations in Europe as well. The last year of the war, 1945, created new days of remembrance for both V-E day (Victory Europe) and V-J day (Victory Japan). The end of the Second World War left two remaining super powers, the United States and Soviet Union, which would form the basis for the Cold War up until the onset of the 1990's.

American Civil War

Several decades after the American Revolution another crisis faced the people of the United States. Slavery, a central issue dividing North versus South, would tear the country apart. In 1861, after the election of President Abraham Lincoln, the souther slave states seceded or left the union forming the Confederate States of America. The northern states would not allow the southern states to leave the union, which as a result, formed the basis for the conflict called the American Civil War.

Prior to the initiation of hostilities, the northern states were relying more on urban industrialized manufacturing for its economic base. On the other hand, the southern states relied entirely on cotton and agriculture to provide revenue. The north had extensive advantages over the south. For example, the northern states had a higher population, increased railways for transportation, and large urban centers that could produce munitions and supplies for the war machine. The south, however, did not hold any advantage in materials aside from cotton. These factors were the major influence on the outcome of the war. By 1865 the northern states decimated the confederate armies and destroyed major cities throughout the south.

Some of the most bloodiest battles in modern history were fought in the United States during the American Civil War. In its earliest stages there were some southern successes, but the largest battles would prove decisively in favor of the northern states. For example, the Battle of Antietam in Maryland in 1862 was the single most bloodiest day in United States history. Over 22,000 soldiers lost their lives in this battle. Later, the Battle of Gettysburg, which was a decisive victory for the Union or northern states, caused over 50,000 casualties in only three days of combat. These battles are just two examples of several conflicts which occurred between the north and south across the eastern United States from 1861-1865.


In its later stages the war was waged in the south. General William Sherman led his army across the southern states destroying everything in its path. Cities such as Atlanta were occupied and left in ruins. As a result, the southern will to fight was broken and surrender became the only option. At the Appomattox courthouse in 1865 General Robert E. Lee of the Confederate States of America surrendered to Ulysses S. Grant of the United States of America, thus ending the American Civil War. The northern states won the war ushering in a period of history named Reconstruction - or a period when the south would require extensive investment to rebuild its infrastructure.

After the Civil War the rights of African-Americans changed extensively. Slavery was outlawed in the United States - making all African-Americans free. Furthermore, amendments such as the 14th provided equal protections for all citizens under the Constitution. These developments would be relied upon almost 90 years later during the Civil Rights movement to further ensure the civil liberties for African-Americans permanently.