CHAPTER 15 American Domestic Policy. Learning Objectives Copyright © 2014 Cengage Learning 2...
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Transcript of CHAPTER 15 American Domestic Policy. Learning Objectives Copyright © 2014 Cengage Learning 2...
CHAPTER 15CHAPTER 15American Domestic PolicyAmerican Domestic Policy
Learning ObjectivesLearning Objectives
Copyright © 2014 Cengage Learning2
Describe the various stages in which the public policymaking process unfolds, as well as the various players involved
Recognize the different theories that justify decisions to craft fiscal policy
Trace the budget-making process, how it unfolds, and the roles played by Congress and the president in the process
Learning ObjectivesLearning Objectives
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Define the different categories of tax policy and assess the differences between mandatory and discretionary spending by government
Trace the development of the Federal Reserve System in the United States
Compare and contrast the prevailing models of criminal justice policymaking
Learning ObjectivesLearning Objectives
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Contrast the U.S. welfare state model to that found in other Western democracies
Assess the state of the Social Security system, its prospects, and reforms
Contrast the various tax-favored investment vehicles that supplement retirement savings
Compare America’s health care system to European systems with universal care
An Overview of the An Overview of the Policymaking ProcessPolicymaking Process
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Most policies go through five stages Recognition/definition Formulation Adoption (or legitimation) Implementation Evaluation
An Overview of the An Overview of the Policymaking ProcessPolicymaking Process
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Public Policy Laws, regulations, and rules that affect the whole
of society Social Policy
Rules, regulations, and policymaking pertaining to the quality of life, welfare, and relations of human beings in the United States
Influential Policy Think TanksInfluential Policy Think Tanks
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Theory and Practice in Fiscal PolicyTheory and Practice in Fiscal Policy
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Fiscal policy How to raise revenue through taxation How to spend the revenue generated
Inflation General upward price movement of goods and
services, measured by CPI Federal Budget
Federal government uses to manage fiscal policy Specifies estimated expenditures and revenues
Theory and Practice in Fiscal PolicyTheory and Practice in Fiscal Policy
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Laissez-faire theory Less economic intervention and minimal
governmental regulations Keynesian economic theory
Influenced FDR’s New Deal policies Increase spending in bad economic times Raise total demand for goods and services
Theory and Practice in Fiscal PolicyTheory and Practice in Fiscal Policy
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Recession Economic slowdown High unemployment Reduced productivity Government spending
May forestall or end a recession May cause inflation and high deficits
Supply-side economics Favors cutting taxes Regan implemented this theory
Theory and Practice in Fiscal PolicyTheory and Practice in Fiscal Policy
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Assessing the Economy’s Performance Gross domestic product (GDP)
Estimate of the total money value of all goods/services produced in a one-year period
Consumer price index (CPI) Index of prices for goods and services regularly traded
Unemployment rate Percent of people unemployed and actively looking for work
Theory and Practice in Fiscal PolicyTheory and Practice in Fiscal Policy
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Assessing the Economy’s Performance Budget deficit and budget surplus National debt Dow Jones Industrial Average Other stock market indexes
Theory and Practice in Fiscal PolicyTheory and Practice in Fiscal Policy
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Assessing the Economy’s Performance Housing starts
Number of residential construction projects begun in a specific period
Consumer confidence index Measures public’s evaluation of economy
Balance of trade figures Net exports
Consumer Confidence in Consumer Confidence in the United States: 2000-2012the United States: 2000-2012
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Theory and Practice in Fiscal PolicyTheory and Practice in Fiscal Policy
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Federal Budget-Making Process Agencies submit budget requests to the
Office of Management and Budget (OMB) OMB prepares a budget proposal Sets guidelines for estimating revenue and
allotting spending
Theory and Practice in Fiscal PolicyTheory and Practice in Fiscal Policy
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Appropriations bills originate in the House Senate revises the House version House and Senate reconcile their versions
Secure enough votes for approval of the final bill Sent to the president for approval
Theory and Practice in Fiscal PolicyTheory and Practice in Fiscal Policy
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Congress may pass “continuing resolutions” Occurs when president and Congress don’t agree Allows government to keep running
Federal government has been forced to close Proposed balanced budget amendment
Spending kept at or below revenue collected Has been defeated on five separate occasions
Total U.S. Debt by Fiscal YearTotal U.S. Debt by Fiscal Year
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Theory and Practice in Fiscal PolicyTheory and Practice in Fiscal Policy
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Taxation Policy Redistributive tax Distributive tax
Sixteenth Amendment Tax an individual’s increase in wealth
Theory and Practice in Fiscal PolicyTheory and Practice in Fiscal Policy
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Progressive tax Tax increases as income increases
Regressive tax Charges all individuals the same amount
Flat tax Tax all individuals at the same rate, regardless
of income
Theory and Practice in Fiscal PolicyTheory and Practice in Fiscal Policy
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Social Security taxes Payroll taxes taken directly out of paycheck Held until retirement
Corporate income taxes Other taxes
Gasoline Communication services Estates
Theory and Practice in Fiscal PolicyTheory and Practice in Fiscal Policy
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Spending Policies - Dividing the Pie Mandatory spending
Not controlled by annual budget decisions Obligated by previously enacted laws Medicare, Social Security
Discretionary spending May be modified or eliminated in a given year Education, environment, and national defense
Where do Federal Tax Dollars Come Where do Federal Tax Dollars Come From and Where Do They Go?From and Where Do They Go?
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Theories and PracticeTheories and Practicein Monetary Policyin Monetary Policy
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Monetary policy How government controls the supply/price of money
Federal Reserve System Acts as nation’s central bank Sets discount rate Engages in open market operations Sets reserve requirements
The Nature and Practice The Nature and Practice of Crime Policy of Crime Policy
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Crime control model Most important function to control criminal behavior “Assembly line justice” Move cases quickly through the system Plea bargains
Due process model Principal goal is justice Decisions based on reliable information Guilt “beyond a reasonable doubt”
The Welfare State The Welfare State and Programs for the Poorand Programs for the Poor
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Welfare state Between capitalism and socialism Aimed to help the poor Viewed by some Americans as giving a “free ride” New Deal and Great Society programs Medicare and Medicaid
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The Welfare State The Welfare State and Programs for the Poorand Programs for the Poor
The Social Security SystemThe Social Security System
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Third rail of American politics Established following the Great Depression Meant to be a “pay-as-you-go” system Economic strains are leading to its demise Serious solvency issues seen for the future Americans turn to 401(k)s and IRAs
Health Care Policy Health Care Policy
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Privately-operated activity in U.S. Individuals secure own health care
Universal health care Full access to healthcare provided at
government expense Patient Protection and Affordable Care Act
Penalizes those without health insurance No public-sponsored health care plans
Health maintenance organizations Limit costs by charging flat monthly rates