2008 Student Congress on Economic Issues

Minneapolis Public Schools—Learning Center for Economics
Federal Reserve Bank of Minneapolis
University of Minnesota Department of Applied Economics Minnesota Council on Economic Education

January 9, 2008
St. Paul Campus
University of Minnesota

Participating High Schools

Edison, Henry, North, Roosevelt, South, Southwest and Washburn

2008 Results

(winning team from each topic):

Topic One
Team One: South/Henry

Topic Two
Team Three: South/Washburn

Topic Three
Team Three: Southwest/Washburn

2008 Economic Congress Questions

Topic One

What should Alejandro do? Alejandro has decided to go to a four-year college after high school. Unfortunately, the school he wants to attend is expensive. After scholarships, grant money, help from his parents and money he has saved, Alejandro still will need $5,000 per year to finance his education. The best thing for Alejandro to do is, evaluating both personal and financial issues (i.e., Net Present Value, risks, personal desires, etc.):

TEAM ONE: South/Henry
Go to school by taking out a loan. The $20,000 he will need can be paid back after he graduates. The interest rate is (5.9%) and he will have 10 years to repay. His monthly payment will be $257.

TEAM TWO: Southwest/Roosevelt/Edison
Work for two years at a full-time job. He can save $10,000 per year living at home with his parents and then he could attend college without taking out a loan and living on a tight budget.

TEAM THREE: Washburn/North
Work part-time while going to school part-time. Alejandro figures he could graduate in six years by using this method and have some financial flexibility.

Note: Be sure to think about opportunity costs and the time value of money as it applies to your position or against another position.

Topic Two

While the U.S. economy has had substantial growth over the last two decades, the difference in income between the poorest and the richest Americans has grown. How should the government address the tension between policies designed to spur economic growth and those that promote equity? Name examples of policies that your position supports.

TEAM ONE: Southwest/Henry
Free market, strong economic growth position. The free market system, which has been notably successful in providing a high standard of living for millions of Americans, is the most promising way to achieve higher wages over the next generation. The best way to increase everyone's share is to make sure that the economic pie keeps growing as rapidly as possible. Americans believe in rewarding effort, providing incentives for new economic ventures, and letting people get rich when they work at it. Government policy should reflect those values. Roosevelt and Washburn.

TEAM TWO: North/Roosevelt/Edison
Fair Share Position. The fact that income for most American families stagnated until recently is due in large part from economic rules that favor affluent Americans at the expense of everyone else. Those at the top of the income scale are getting the lion's share of the benefits of economic growth. But most members of the labor force are not sharing in the gains. Sharp differences in income generate social unrest, which can lead to uncertainty, declining investment and weak economic growth. Government should enact a more progressive tax and social service system to help reduce the disparity between the poorest and richest Americans.

TEAM THREE: South/Washburn
Equal Opportunity Position. The promise of America is equal opportunity. Government's task is to do everything possible to provide an equal opportunity for economic advancement. The fact that income for most Americans has not risen steadily in recent years is a result of our failure as a nation to prepare people adequately so everyone has a chance to compete for good jobs. What's needed is an expanded effort to improve America's schools, to provide equal opportunity for all youngsters regardless of their parents' occupation and income.

Topic Three

What role, if any, should the United States play in addressing poverty in developing countries?

TEAM ONE: North/South/Edison
Forgive debt. Developing countries have amassed a significant amount of debt. For some countries, debt payments are a considerable percent of total public expenditure. The United States could forgive countries of debts to the U.S. government and negotiate debt relief with U.S. banks. This effort would likely ripple to other developed countries, encouraging other governments and banks to also forgive debts to developing countries.

TEAM TWO: Roosevelt/Henry
Reduce trade barriers to foreign products and subsidies to U.S. companies that keep key products of developing countries from entering the United States. A key example is agricultural subsidies to U.S. farmers. While price supports for U.S. crops boost farm income domestically, they give U.S. farmers an advantage relative to producers in developing countries. Agriculture producers abroad miss the opportunity to sell in U.S. markets, greatly reducing their profitability.

TEAM THREE: Southwest/Washburn
Direct foreign aid. Support from the United States in the form of spending for education, roads, food and health care would allow developing countries to gain the necessary level of economic infrastructure to begin to accumulating wealth.

 
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