What should the Federal Government do i order to encourage...

1. What should the federal government do in order to encourage investment in human capital? The decision to invest in human capital is influenced by considerations similar to those that motivate a firm to invest in physical capital: the cost of the investment verse the expected return. For example, investing in a college education may require the one borrow the money for tuition. If the interest rates on the loan rise then people will most be less likely to invest in a college education. Thus, investment in education may be negatively related to the interest rate, much as physical investment is. This is one reason why, in order to encourage economic growth and productivity, the U.S government provides low interest loans for college†¦show more content†¦The first year of the tax generated $125 million in revenue (Forbes 2012). In 1940, the tax was raised to 1.5 cents per gallon, which would be equivalent of a rate of 24.26 per gallon in 2011 dollars (Forbes 2012). Current federal gas taxes adjusted for inflation, dipped below the effective rate of today after the wa r and during the early 50s, but then came the Federal Highway Act of 1956. Taxes went to a whopping 3 cents a gallon, equivalent to 24.97 cents per gallon today. Eisenhower raised the rate to 4 cents a gallon in 1959, popping it to an effective rate of 30.6 cents in today’s dollars. But then it stuck. The 4 cents per gallon rate stayed constant until 1983. Reagan, the alleged tax fighter, raised the rate to 9 cents per gallon in 1983. Subsequent hikes by Bush (14 cents a gallon in 1990 dollar or 24.4 cents today) and Clinton (18.3 cents or 28.8 cents in today’s terms) kept older rates higher (Forbes 2012). History tends to show gas taxes don’t seem to have that much impact on the overall economy. The hikes have occurred under both Republican and Democratic administrations: the most prominent increases, in fact, occurred under Republicans Hoover, Reagan and Eisenhower. 4. â€Å"Real economic growth is critical for the economy and desirable for the United States†Show MoreRelatedThe Dust Bowl Essay1038 Words   |  5 Pages (pg. 5) Worster proposes that in American society, as in all others, there are certain accepted ways of using the land. 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