Economic and Social Welfare Policymaking

2. Economic and Social Welfare Policymaking 16 Kevork Djansezian/Getty Images News/Getty Images

3. 16 Learning Objectives • Identify the main policy tools that American government can employ to address economic problems, and contrast Keynesian and supply-side economics. 16.1 • Compare and contrast entitlement and means-tested social welfare programs. 16.2

4. 16 Learning Objectives • Assess the extent of economic inequality in America and the role of government in lessening it. 16.3 • Trace the change over time in major federal welfare programs. 16.4

5. 16 Learning Objectives • Outline how America's Social Security program works and the challenge of keeping it financially solvent in the coming years. 16.5 • Distinguish American social welfare policy from that of other established democracies. 16.6

6. 16 Learning Objectives • Assess the impact of social welfare policies on democracy and the scope of government in America. 16.7

7. 16.1 Economic Policymaking • Two Major Worries: Unemployment and Inflation • Policies for Controlling the Economy • Why It Is Hard to Control the Economy

8. Unemployment rate 10% in Great Recession Underemployment rate Tracked by Bureau of Labor Statistics (BLS) Inflation Rise in price of goods and services Consumer price index (CPI) Averages 4% 16.1 Two Major Worries: Unemployment and Inflation

9. Laissez-faire Monetary policy and the "fed" Federal Reserve Board Meets in secret; not accountable to Congress Manipulating the amount of money 16.1 Policies for Controlling the Economy

10. Fiscal policy: Keynesian v. supply-side economics Taxing, spending, borrowing Keynesian economic theory Supply-side economics 16.1 Policies for Controlling the Economy

11. 16.1 Chairman of the Fed, Janet Yellen Bloomberg/Getty Images

12. FIGURE 16.1 How the Obama administration's predictions of the impact of the 2009 stimulus plan went awry 16.1

13. "Political business cycle" Presidents control economy to win elections Private sector dominates economy Federal government is ¼ of GDP Impact of government policies gradual 16.1 Why It Is Hard to Control the Economy

14. 16.1 16.1Laissez-faire economic theory holds that government intervention in the economy Is needed during recessions and depressions Is key to preventing inflation Is detrimental to economic growth and prosperity Is necessary only when interest rates are too high

15. 16.1 16.1Laissez-faire economic theory holds that government intervention in the economy Is needed during recessions and depressions Is key to preventing inflation Is detrimental to economic growth and prosperity Is necessary only when interest rates are too high

16. 16.2 Types of Social Welfare Policies • Biggest government expense • Only 17% goes to poor

17. 16.2 Types of Social Welfare Policies • Entitlement programs • Social Security, Medicare • Largest and most expensive

18. 16.2 Types of Social Welfare Policies • Means-tested programs • Food stamps, Medicaid • Fear of dependency

19. 16.2 16.2Which of the following is an example of an entitlement program? Food stamps Medicaid Postal service Medicare

20. 16.2 16.2Which of the following is an example of an entitlement program? Food stamps Medicaid Postal service Medicare

21. 16.3 Income, Poverty, and Public Policy • Who's Getting What? • Who's Poor in America? • How Public Policy Affects Income

22. 16.3 99% Chip Somodevilla/Getty Images News/Getty Images

23. Income distribution Sense of justice and equality in a democracy Relative deprivation increasing Wealth versus income Income is amount collected in given time Wealth is value of assets 1/3 of wealth held by 1% 1/3 held by 90% 16.3 Who's Getting What?

24. 16.3 FIGURE 16.2 Increase in income inequality and the rise of the top 1%

25. Poverty line $11,139 in 2010 46.6 million Americans poor in 2010 15.2% of population Demographics of poverty Feminization of poverty 16.3 Who's Poor in America?

26. 16.3 If landmass were divided like wealth

27. FIGURE 16.3 Poverty rates for persons with selected characteristics: A comparison of the official and supplemental measures 16.3

28. Taxation Progressive Proportional Regressive 16.3 How Public Policy Affects Income

29. Government Expenditures Transfer payments Social security, unemployment benefits, food stamps, etc. 16.3 How Public Policy Affects Income

30. 16.3 EBT at the farmers' market Rich Pedroncelli/AP Images

31. TABLE 16.1 The major social welfare programs 16.3

32. 16.3 16.3What percentage of Americans live below the poverty line? 5.3% 10% 15.2% 25.6%

33. 16.3 16.3What percentage of Americans live below the poverty line? 5.3% 10% 15.2% 25.6%

34. 16.4 Helping the Poor? Social Policy and the Needy • "Welfare" as We Knew It • Ending Welfare as We Knew It: The Welfare Reform of 1996

35. FDR's New Deal programs Social Security Act of 1935 AFDC Johnson's War on Poverty Food stamps 16.4 "Welfare" as We Knew It

36. Republican's war on dependency "Welfare queens" Deadbeat dads The undeserving poor/African Americans 16.4 "Welfare" as We Knew It

37. Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) States would run their own programs Two year limit for benefits Lifetime maximum of 5 years From AFDC to TANF Reforms were effective Benefit dollar amounts declined Number of recipients declined 16.4 Ending Welfare as We Knew It: The Welfare Reform of 1996

38. 16.4 Climb Wyoming Carmel Zucker/The New York Times/Redux

39. 16.4 FIGURE 16.4: How welfare reform drastically reduced the welfare rolls

40. 16.4 16.4Which of the following was a goal of welfare reform? Reduce the number of people living in poverty Reduce the number of children who lack medical insurance Reduce the number of people receiving welfare benefits Reduce the need for job training to get people off welfare

41. 16.4 16.4Which of the following was a goal of welfare reform? Reduce the number of people living in poverty Reduce the number of children who lack medical insurance Reduce the number of people receiving welfare benefits Reduce the need for job training to get people off welfare

42. 16.5 Social Security: Living on Borrowed Time • The Growth of Social Security • Reforming Social Security

43. Popular program Modest benefits Average $1,229/month Most expensive public policy But fiscally sound Surplus depleting since 2010 What is the solution? 16.5 Growth of Social Security

44. Politically difficult Older Americans have high voting rate Reform proposals Bush: Put 1/3 into private investments Obama Increase age to receive benefits Lower inflation raises Reduce benefits for wealthy recipients Raise contribution amounts 16.5 Reforming Social Security

45. 16.5 16.5Which of the following was a Social Security reform proposed by President Bush? Lower age to receive benefits Increase contributions Raise age to receive benefits Divert funds to stock market

46. 16.5 16.5Which of the following was a Social Security reform proposed by President Bush? Lower age to receive benefits Increase contributions Raise age to receive benefits Divert funds to stock market

47. 16.6 Social Welfare Policy Elsewhere • The European welfare state • Taxes and benefits • Individual v. government responsibility

48. 16.6 16.6What is the main difference in the American and European attitudes toward poverty? Americans believe poverty is your own fault Europeans believe poverty is a result of circumstances beyond your control Both A & B Neither A nor B

49. 16.6 16.6What is the main difference in the American and European attitudes toward poverty? Americans believe poverty is your own fault Europeans believe poverty is a result of circumstances beyond your control Both A & B Neither A nor B

50. 16.7 Understanding Economic and Social Welfare Policymaking • Democracy and Economic and Social Welfare Policies • Economic and Social Welfare Policies and the Scope of Government