Reference no: EM131031744

Write a review on each of the following post. The review of each post should be a minimum of 100 words. If you can do each one in a separate word document.

1. For drivers, we drive on congested traffic filled roads every day. Some commutes on major highways can sometimes feel like riding into hell. Privatizing our roads seems like a preposterous idea, it may be a beneficial solution however. On a free road the "The Federal Highway Administration provides stewardship over the construction, maintenance, and preservation of the nation's highways, bridges and tunnels" (fwha 2012). Local and state governments are contracted by the federal government to complete these projects. The men and women who complete these contracts have very little incentive to complete their tasks efficiently. Most are overworked and under payed for their jobs as government employees. This leaves free roads with many problems like potholes, unfinished construction, and damage leading to congestion.
A private contractor pays the government to lease part of a major highway, then installs tolls that vary the price during peak traffic hours. Each driver can choose to travel on this portion of the road or not. By choosing to take the toll portion, they can travel up to the speed limit comfortably, drive on a maintained road, and get to their destination with less congestion. A private contractor has the incentive to take care of, and maintain their property, because they are paying for it. The use of the tolls internalizes the congestion externality and reduces the number of trips drivers take down the congested road. This leads to less congestion as a whole.

There is a benefit to privatization of roads, which leads to drivers being happy about their commute to work. With the simple use of varying tolls, private companies have found a way to maintain congestion better than the governments have. They have even managed to make a profit doing it. A profit that returns to the state and benefits it, helping common resources like parks and recreational areas. It would seem that privatizing, at the very least, large highways would be a gain for this market.

Mankiw, N. G. (2015) Principles of economics. Stamford, CT Cengage Learning

U.S. Department of Transportation. (2012) Federal highway administration. Washington, DC. Retrieved from https://www.fhwa.dot.gov

2. It is very easy to assume all politics corrupt. Why not? Government generate so much money in taxes jet the public doesn't really see the benefits it should bear. I have a better opinion, governments are inefficient. Tax money is managing by the politicians, politicians are elected by the people, and if the people don't like what the politicians do with the taxes, they protest and elect new politician if the once in place do not comply with the demands. There is a major problem with these equations, the general public is the one making the decision and they have no idea how an economy works.

A clear example of government inefficient are the free roads. Free, really? I spend so much time in the free road that it is obvious that I am wasting my time. I rather spend money than to waste time, after all time is something we never get back.

Toll roads are a great way to alleviate congestions and generate additional funds in order to maintain and increase the amount of roads require, wish always increase, the demand never stops, therefore there has to be an adequate supply to satisfies the needs of the consumers, but like we mention before, the roads are manage by the government, and their inefficiency keeps the supply a step behind the demand, creating a rise in the prices as we have seeing in graph D.

A solution to this problem could be the inclusion of the private sector in the managing of roads. Not only will the government profit from taxing these private companies and by leasing the roads, but the efficiency will greatly increase, as there will be a competition in the market. The monopoly of the government, being the only one to control this sector of society, is the greatest contributor to the inefficiency of the same.

I believe that the private sector should be allow to assist the government in providing with basic needs of society. We can achieve this with the inclusion of Economic Principles as a mandatory school class, the general public will learn to trust the private sector, and allow equilibrium in the government run sectors of society.