1.If you are currently working in the public sector, identify the function you undertake in your agency. If you do not work in the public sector, think of one service that you recently received from the government. Either way, explain how you would justify or critique whether the government should or should not provide that service to the public. Engage and cite the learning materials of this week.

I am currently working for the Travis County Emergency Services District 1 as a fire chief. My job description is similar to the Chief Executive Officer of the organization. I am the manager of the Emergency Service District firefighters department that is regulated by five board members. I manage six fire stations with 57 employees and control an annual budget of $5, 400,000. The fire department is an organization within the public sector. Unlike profit-making organizations, the fire department majorly depends on funding from the government. The organization also draws funds from offering EMS services at cheap costs shared with taxpayers. Firefighting is a service that is provided to the public by the government. The government’s role is to ensure the safety and security of its citizens and using departments such as firefighting and the police; the government protects its people from both natural and human hazards.

Tax payers’ funds are an essential part of the municipal budgets. As such, offering firefighting services to citizens are value for their money. Firefighters receive extensive training to be able to combat hazardous fire incidences. Fires are hazards that may result in deaths, destruction of property and environment degradation. Due to the complexity of the industrialized states, wildfires are growing hazards making firefighting an essential department of civilian protection. The country through the local and federal government has the role of providing training and certification for firefighters. The firefighters, the police, and medical service providers with the emergency medical service team work together to put out fires and rescue citizens. Firefighters and police investigate fires and arson attacks as well as offer basic first aid to fire victims. Firefighters just as the police have a public helpline where citizens can report fire incidences. The police through the 911 services also ensure that citizens are kept safe from criminal attacks and other disasters as firefighter do. Disaster management is a primary department of all functional government as no society exists free of calamities.

2. Based on your observations and experiences, what are the challenges for the government when making decisions about budget allocations?

The fire department is a government organization. However, it is not a profit making entity, as such it depends on taxpayers and government funds for budget allocation. Firefighters cannot increase the prices of products and additional taxes cannot be raised merely by the local government without proper elections. The central government regulates different departments. Although all departments are essential to civilian welfare, there are circumstances when it is difficult to prioritize expenditures according to urgency.  For instance, when investing in infrastructure, the government has to be tactically in selecting which project to fund. It is essential to choose a high-value plans that will result in profits in the long run. There are also instances when the budgetary allocation is inadequate due to unforeseen expenditure. Some forces also affect the market trends, as such changes in price may cause over and under budgeting.

The government may also face a bureaucratic problem when in the process of budget allocation. The budgetary process and management should be appropriately connected. The two procedures should be synchronized for effective budget implementation. Government resources are at times limited; however, there may be different ideas on how to invest in the funds. As such, it is essential to carry out proper planning before budget allocation to ensure appropriate selection of original projects. The government should also limit the number of projects carried out annually; this is to reduce the strain on resources. Fiscal sustainability is another challenge for government budgetary allocations. Although it is not given much emphasis, it is fundamental that the government ensures they use their resource appropriately by investing in income-generating projects. The political situation of the country may also affect budget allocations. When there is political instability in the country the financial organization of the government is put under jeopardy and budgeting cannot be carried out in such situations. Other challenges include corruption, fluctuation of currency and mismanagement of funds by politicians and other financial officials.

3. Note one or two specific concepts that stand out to you as noteworthy in some way. This can be something totally new to you or something that you had never thought about in precisely this way (e.g. seeing it through a new lens). List the page number where you found the concept.

Adverse selection and moral hazards are critical economic concepts. The government plays an essential role within the market; government intervention is necessary for maintaining consumer safety and security. Most organizations tend to hide information about the product and services they provide within the markets. The government through agencies such as the FDA (Food Drug and Administration), conduct tests on products to evaluate chemical components within them for certification as fit for human consumption. There are instances when consumers have reported safety and chemical problems with food products such as peanut butter, canned foods among others. Consumers do not have the appropriate tools to protect themselves from the challenges of the global economy as products are imported and exported to different parts of the world.

Financial institutions operating with the finance and insurance sector can present consumers with fiscal challenges associated with moral hazard and adverse selections. Adverse selection is a condition that results when insurance providers impose higher prices than intended for their consumers. Adverse selection is also a problem associated with health services providers. Government intervention is limited to unregulated private healthcare insurance providers. As such, most companies tend to define their insurance policies to restricted ages because as people advance in age the health costs increase (Mikesell & Mullins, 2006). However, government intervention through programs such as the Medicare assists the citizens in handling such challenges. Moral hazards on the other hand, involves a condition where individuals who have taken up an insurance policy considering it a form of incentive to create an event that will likely result in the development of the insurance event or be less concerned with averting the conditions. People tend to carry out risky decisions especially when there is someone else behind them, as such insurances may increase the chances of people carrying out negligent acts such as road accidents and arson attacks as they are sure of payment no matter the circumstances. There are also instances when the government intervenes through the creation of insurance policies for natural disasters such as earthquakes and flood as an incentive for private developers and citizens to resettle and rebuild after the occurrence of natural disasters. Therefore there are governments role in economics is quite essential.

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