Unit 5 (Chapters 17-20)

Chapter 17: Economic Policymaking

U.S. Economic Foundation
The Untied States economy was founded on the basis of capitalism in a mixed economy. Capitalism allowed individuals and corportations to influence the economy. When put into a mixed economy, c fuck bitches get moneyapitalism still took place, but the government can also become involved in economic decisions.

Government Regulation of Business Practices
The agency responsible for regulating business practices is the Securities and Exchange Commission (SEC).

Worries of the Nation
Unemployment and inflation are two major worries for the nation. Unemployment rate is measured by the Bureau of Labor Statistics. It is the proportion of the labor force actively seeking work but unable to find jobs. The higher unemployment rate is, the more people push policymakers to "do more" to expand employment. Inflation is the rise in prices for consumer goods. Inflation causes much economic concern because it increases the cost of living.

Monetary Policy
  • Monetary Policy- the manipulation of the supply of money in private hands by which the government can control the economy. This is the most important tool the government has to control the economy.
  • Federal Reserve System- Created by Congress in 1913, it regulates the lending practices of banks and thus the money supply. The Federal Reserve System deals with the amount of money available, interest rates, inflation, and the availability of jobs.

Economic Theory
  • Laissez-faire- This is the principle that government should not meddle in the economy.
  • Keynesian Economic Theory- The theory emphasizing that government spending and deficits can help the economy weather its normal ups and downs.
  • Supply-side Economics- An economic theory advocated by President Reagan holding that too much income goes to taxes so that too little money is abailable for purchasing and that the solution is to cut taxes and return purchasing power to consumers.
  • Protectionism- The economic policy of shielding an economy from imports.
  • Conservatories in Worthing.

Chapter 18: Social Welfare Policymaking

What is Social Welfare?
Social welfare is made up of policies that are provide benefits to individuals, either through entitlements or means testing. Both the national government and state governments have social welfare policies.
  • Entitlement Programs- Government benefits that certain qualified individuals are entitled to by law, regardless of need. Federal entitlements cost a total of $3 billion a day!
  • Means-tested Programs- Government programs available only to individuals who qualify for them based on specific needs.

Income, Poverty, and Public Policy
America has a vastly uneven distribution of wealth. The concept of income distribution describes the share of national income earned by various groups. In the 1960s and 1970s, the nations wealth was rather spread out. Into the 1980s though, it became more uneven.
  • Income- The amount of funds collected between any two points in time.
  • Wealth- The value of assets owned.

Income is distributed far better than that of wealth. One-third of the nation's wealth is held by the richest one percent of the population.
Who's Poor?
To be considered poor, someone must fall on or below the poverty line. The poverty line is the method used to count the number of poor people, it considers what a family must spend for an "austere" standard of living.

There are many ways to tax. There are three main ways:
  • Progressive Tax- A tax by which the government takes a greater share of the income of the rich than of the poor.
  • Proportional Tax- A tax by which the government takes the same share of income from everyone, rich and poor alike.
  • Regressive Tax- A tax in which the burden falls relatively more heavily on low-income groups than on wealthy taxpayers.

Social Policy and Poverty
  • Social Security Act of 1935- Created both the Social Security Program and national assistance program for poor children. This program brought together scattered, uneven state programs under a single federal umbrella. Eventually, these programs became bitterly divided between Republicans and Democrats, Conservatives and liberals.
  • Personal Responsibility and Work Opportunity Reconciliation Act- The official name of the welfare reform law of 1996. Passed by President Clinton, the law made: (1) each stat would receive a fixed amount of money to run its own welfare programs, (2) people on welfare would have to find work within two years or lose all their benefits, and (3) there would be a lifetime maximum of five years for welfare.
  • Temporary Assistance for Needy Families- Once called "Aid to Families with Dependent Children," the new name for public assistance to needy families. Its the new name for welfare. The average family receiving money welfare collects roughly $363 a month.
  • Social Security Trust Fund- The "bank account" into which Social Security contributions are "deposited" and used to pay out eligible recipients. The way Social Security works is the Government taxes workers and their employers a percent of the employee's income up to a maximum. This money is then put into the fund.

Chapter 19: Policymaking for Health Care, the Environment, and Energy

Health Care in America
The U.S. spends roughly $2.3 trillion a year on health care. Health care expenditures are on the the largest single components of America's economy. It accounts for one seventh of the gross domestic product.

Uneven Coverage, Uneven Car
The majority of health care coverage for Americans is from private insurance plans. Many times today, people and their employers contract with a health maintenance organization. These organizations are contracted by individuals or insurance companies to provide health care for a yearly fee. Such network health plans limit the choice of doctors and treatments. About 60 percent of Americans are enrolled in health maintenance organizations or similar programs.

Government in Health Care
The U.S. has the most privatized medical care system in the world. The majority of other nations follow a national health insurance program. This is a compulsory insurance program for all people that would have the government finance citizens' medical care.

The U.S. does have some national health care policies. They are:
  • Medicare- A program added to the Social Security system in 1965 that provides hospitalization insurance for the elderly and permits older Americans to purchase inexpensive coverage for doctor fees and other medical expenses.
  • Medicaid- A public assistance program designed to provide health care for poor Americans

Environmental Policy
  • Environmental Protection Agency- An agency of the federal government created in 1970 that administers much of U.S. environmental protection policy. EPA is charged with administering policies dealing with land, air, and water quality.
  • Clean Air Act of 1970- Charged the Department of Transportation with the responsibility of reducing automobile emissions. Clean Air Act was reauthorized in 1990 by Congress adding more controls on cars, oil refineries, chemical plants, and coal-fired utility plants.
  • Water Pollution Control Act of 1972- This law intended to clean up the nation's rivers and lakes. It requires municipal, industrial, and other polluters to use pollution control technology and secure permits from the EPA for discharging waste products into waters.
  • Endangered Species Act of 1973- Law requires the federal government to protect actively each of the hundreds of species listed as endangered- regardless of the economic effect on the surrounding towns or region.
  • Superfund- A fund created by Congress in 1980 to clean up hazardous waste sites. Money for fund comes from taxing chemical products.

Chapter 20: National Security Policymaking

American Foreign Policy
  • Foreign Policy- A policy that involves choice taking, like domestic policy, but additionally involves choices about relations with the rest of the world. The president is the chief initiator of foreign policy in the U.S.
Since the president is the main force for foreign policy, he is briefed every morning on intelligence collected. There are three different parts of foreign policy: military, economic, and diplomacy.
  • Military- Uses the threat of war for foreign policy. U.S. often has employed this to influence actions of other countries. This has become a less effective way to get countries to do what you want.
  • Economic- Uses controls on trade for foreign policy. Uses trade regulations, tariff policies, and monetary policies to influence what is wanted on other countries.
  • Diplomacy- Quietest form of foreign policy. Chief diplomats or lower diplomats meet and work out resolutions.

Organizations Influencing Foreign Policy
  • United Nations (UN)- Created in 1945, on organization whose members agree to renounce war and to respect certain human and economic freedoms. The seat of real power in the United Nations is the Security Council. UN's main headquarters is located in New York City.
  • North Atlantic Treaty Organization (NATO)- Created in 1949, and organization whose members include the U.S., Canada, most Western European nations, and Turkey, all of whom agreed to combine military forces and to treat a war against one as a war against all.
  • European Union- A transnational government composed of most European nations that coordinates monetary, trade, immigration, and labor policies, making its members one economic unit. This is an example of a regional organization.
Foreign Policymakers
The President is the chief foreign policymaker, but he also has help from the secretary of state, the secretary of defense, his joint chiefs of staff, and the Central Intelligence Agency.
  • Secretary of State- The head of the Department of State and traditionally a key adviser to the president on foreign policy.
  • Secretary of defense- The head of the Department of Defense and the president's key adviser on military policy.
  • Joint Chiefs of Staff- The commanding officers of the armed services who advise the president on military policy.
  • Central Intelligence Agency (CIA)- An agency created after World War II to coordinate American intelligence activities abroad. it became involved in intrigue, conspiracy, and meddling as well.

Ways to go about Foreign Policy
  • Isolationism- A foreign policy course followed throughout most of our nation's history whereby the United States tried to stay out of other nations' conflicts, particularly European wars.
  • Containment Doctrine- A foreign policy strategy advocated by George Kennan that called for the U.S. to isolate the Soviet Union, "contain" its advances, and resist its encroachments by peaceful means if possible but by force if necessary.

Foreign Aid
In the U.S., foreign aid is not a large concern for appropriating funds. Congress appropriates less than 1 percent of the budget to foreign aid. Most aid for countries from the U.S. comes from private organizations.