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NEED TO KNOW: Unit 5

NEED TO KNOW: Unit 5. Public Policy. Chapter 17. Policy-making process. Policy-Making Process. Costs vs. Benefits; Distributed vs. Concentrated Majoritarian Politics Distributed Costs, Distributed Benefits Ex, Social Security, National Defense Interest Group Politics

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NEED TO KNOW: Unit 5

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  1. NEED TO KNOW: Unit 5 Public Policy

  2. Chapter 17 Policy-making process

  3. Policy-Making Process • Costs vs. Benefits; Distributed vs. Concentrated • Majoritarian Politics • Distributed Costs, Distributed Benefits • Ex, Social Security, National Defense • Interest Group Politics • Concentrated Costs, Concentrated Benefits • Ex, Labor Disputes • Client Politics • Distributed Costs, Concentrated Benefits • Ex, Pork-Barrel Legislation • Entrepreneurial Politics • Concentrated Costs, Distributed Benefits • Ex, Superfund

  4. Chapter 18 Economic policy

  5. Economic Decision-Making • Deficit • Spending more than Revenue • National Debt • TOTAL owed • All deficits since beginning of USA – today = $17 Trillion • Economy and Politics • Pocketbook Voting • Troika – President’s economic advisors • CEA – expert analysis • OMB – helps prepare budget • Secretary of Treasury – link to finance industry

  6. Economic Theories • Monetarism • Fix economy by regulating the money supply • Keynesianism • Government should SPEND to stimulate economy • Economic Planning • Government should use wage and price controls to direct economy • Supply-Side Theory • Tax cuts will lead to increased productivity • Reaganomics • Mix of Supply-Side tax cuts, decreased domestic spending, monetarism, and increased military spending – Successful in short-term, terrible in long term

  7. Monetary Policy • Monetary Policy = Supply of money, interest rates • Federal Reserve is in charge of Monetary Policy • FED • 7 members of Fed Board (appointed & confirmed) • 14 year, non-renewable terms • 12 Regional FED banks • 6,000 Member banks • Independent of Prez and Congress? • What the Fed Does • Buy & Sell bonds to increase/decrease money supply • Require banks to keep money on hand (affects interest on loans) • Change interest rates

  8. Fiscal Policy • Fiscal Policy = Taxing and Spending (Prez & Congress) • Federal Budget • Process: Prez & OMB prepare budget proposal, send to Congress • Congress studies budget with CBO & pass Budget Resolutions (budget ceiling). • Specific Appropriations bills need to be passed individually • New budget amount based on previous year • Mandatory Spending (Entitlements) vs. Discretionary Spending • Largent Mandatory = Social Security & Medicare (2/3 of budget) • Largest Discretionary = Military • Entitlements = required spending on programs to help those who qualify • Attempts to bring down budget deficit • Gramm-Rudman-Hollings • Caps on Spending, Sequester • Budget Enforcement Act of 1990 • Pay-as-you-go approach

  9. Taxes • Largest Sources of Revenue • Income Taxes (US tax rates much LOWER than World) • Payroll Taxes (Social Security) • Corporate Income Taxes • Kinds of Taxes • Proportional – Same %, no matter the income • Progressive – Higher income = Higher % • Income Tax • Regressive – Higher income = Lower % • Sales Tax

  10. Chapter 19 Social welfare

  11. Social Welfare • Entitlements • Means-Test = only for people below certain income level • Social Security = biggest entitlement • Contributory (we pay into it – so do employers) • May go bankrupt soon-ish • Medicare (old people – no means test) vs. Medicaid (poor people – means test) • AFDC (welfare) – very controversial – no longer exists

  12. Chapter 20 Foreign and military policy

  13. Foreign Policy Groups • Sec of State • Diplomacy • Sec of Defense • Administrative (Civilian) Head of Military • Joint Chiefs of Staff • Military leaders of each branch • National Security Council • Prez, VP, Sec of State & Def, Chairman of JCoS, NSA

  14. Congress vs. President • Congress • Declare War • Power of the Purse • Oversight • War Powers Resolution • Approve Treaties and Ambassadors • President • Commander-in-Chief • Treaties • Ambassadors • Power of the Public • The 2 Presidencies

  15. US Military • Civilian Control of the Military • Chain of Command • Defense Budget • Bigger than other top 11 nations combined • Defense Cuts very difficult • Military-Industrial Complex • Defense Contractors too powerful • War is used to make profit

  16. Chapter 21 Environmental policy

  17. Environmental Policy • EPA • Global Warming Debate • Pollution • Offsets • Bubble Standards • Pollution Allowances • Superfund

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