P OLICYMAKING Economic, Social Welfare, Environmental, and National Security.
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Transcript of P OLICYMAKING Economic, Social Welfare, Environmental, and National Security.
POLICYMAKING
Economic, Social Welfare, Environmental, and National Security
PEARSON EDUCATION, INC., LONGMAN © 2008
TWEDYAODWTS:
4/6
“The earth belongs to the living generation: they may manage it, then and what proceeds from it, as they please, during their usufruct.”
Thomas Jefferson, 1789
ECONOMIC POLICY
POLITICS AND THE ECONOMY
Introduction Capitalism:
An economic system in which individuals and corporations, not the government, own the principal means of productions and seek profits
Mixed Economy: An economic system in which the government is deeply involved
in economic decisions through its role as regulator, consumer, subsidizer, taxer, employer and borrower
Multinational Corporations: Businesses with vast holdings (facilities) in at least one other
country than it’s home country
Examples: Nike (U.S.), Honda (Japan), BMW (gERMAN
POLITICS AND THE ECONOMY
Economic Policy at Work: An Illustration Government Regulation and Business
Practices Securities and Exchange Commission regulates
stock fraud
Minimum wage:
Labor union:
Collective bargaining:
POLITICS AND THE ECONOMY
“It’s the Economy, Stupid”: Voters, Politicians, and Economic Policy
Economic trends affect who voters vote for.
Economic conditions are the best predictor of voters’ evaluation of the president.
Republicans worry about inflation.
Democrats stress importance of unemployment.
POLITICS AND THE ECONOMY
Two Major Worries: Unemployment and Inflation
Unemployment Rate: measured by the Bureau of Labor Statistics (BLS)
Inflation: Sustained increase in the general level of prices for goods and services.
For example, if the inflation rate is 2% annually, then theoretically a $1 pack of gum will cost $1.02 in a year
PEARSON EDUCATION, INC., LONGMAN © 2008
Monetary Policy and “the Fed”
Monetary Policy: the manipulation of the supply of money in private hands–too much cash and credit produces inflation
Money supply affects the rate of interest paid, more money = higher interest rates
Main policymaker is the Board of Governors of the Federal Reserve System–the “Fed” Created in 1913 to regulate lending practices of banks
and thus the money they supply
Monetary Policy and “the Fed” (continued) The Feds instruments to influence the supply of
money in circulation: Sets the federal funds rate
Buys and sells government bonds
Laissez-faire: principle that government should not meddle in the economy
Fiscal Policy of Presidents and Parties
Fiscal Policy: the policy that describes the impact of the federal budget on the economy
Keynesian Economic Theory: Government’s job is to increase demand of goods
Supply-Side Economics: Reduce taxation and government regulation then
people will work harder, and thus create a greater supply of goods
POLITICS AND THE ECONOMY
Some think politicians manipulate the economy to win reelection.
But there are problems with that: Things like the budget are prepared in advance of
when they go into effect
Government makes economic policy slowly
Some benefits are indexed
Capitalism can also affect the economy
Federal government spends less than 20 percent of GDP
THE BUDGET
Budget: a document that announces how much the government will collect in taxes and spend in revenues and how those expenditures will be allocated among various programs
Fiscal year: time period covered by the budget, running from October 1 to September 30 of the following year
CONGRESSIONAL BUDGET ACT, 1974
President submits budget
House and Senate budget committees analyze the budget, with the Congressional Budget Office
Each committee proposes to its house a budget resolution that sets a total budget ceiling and ceilings for each of several spending areas
Congress considers appropriations bills and sees whether they are congruent with the budget resolution
Appropriations bills cannot make big changes in the budget because approximately 2/3 of government spending is on entitlements
SOCIAL WELFARE POLICY
INCOME & POVERTY
Who’s Getting What? Income: Amount of Money You
Receive (Paycheck) Wealth: (Your accumulated
assets)
INCOME & POVERTY
U.S. has one of the largest income gaps in the world Income Distribution is extremely uneven
Income Distribution: 1% of the total population possesses more than 1/3 of all wealth Total assets of that 1% are actually higher than the total worth of 90% of
Americans
INCOME & POVERTY
Who’s Poor in America? Poverty Line: considers what a family must spend
for an “austere” standard of living
In 2012 the poverty line for a family of four was $23,492—46.5 million Americans—about 15 percent—poor in 2012
Many people move in and out of poverty in a year’s time.
Feminization of poverty: Poverty rate 38% higher
INCOME & POVERTY
INCOME & POVERTY
What Part Does Government Play? Taxation
Progressive tax:
Proportional tax:
Regressive tax:
Earned Income Tax Credit:
INCOME & POVERTY
What Part Does Government Play?
Government Expenditures Transfer payments:
Some transfer benefits are actual money, such as social security—entitlements
Other transfer benefits are “in kind” benefits where recipients get a benefit without getting actual money, such as food stamps—means tested
WHAT IS SOCIAL POLICY AND WHY IS IT SO CONTROVERSIAL?
Social welfare policies provide benefits to individuals, through:
Entitlement programs:
Means-tested programs:
INCOME & POVERTY
HELPING THE POOR?
“Welfare” as We Knew it
Social Security Act of 1935—first major step by the federal government to help protect people against absolute poverty Set up Social Security Program and AFDC,
a national assistance program for poor children
President Johnson declared a “war on poverty” and created many new social welfare programs.
HELPING THE POOR?
“Welfare” as We Knew it (continued)
President Reagan cut welfare benefits and removed people from benefit rolls.
Conservatives argued that welfare programs discouraged the poor from solving their problems.
Attitudes toward welfare became “race coded,” the belief that most people on welfare were African Americans.
HELPING THE POOR?
Ending Welfare as We Knew it: The Welfare Reforms of 1996 Personal Responsibility and Work Opportunity Act
Each state to receive a fixed amount of money to run its own welfare programs
People on welfare would have to find work within two years.
Lifetime limit of five years placed on welfare.
AFDC changed to Temporary Assistance for Needy Families (TANF) Welfare rolls declined, even though income of TANF
recipients is still low
LIVING ON BORROWED TIME: SOCIAL SECURITY
Social Welfare Policy Elsewhere
Many industrialized nations are more generous than the U.S., but the tax rates are higher in those countries than in the U.S.
Other countries (especially Europe) have worked to reform their welfare programs, as their programs are in trouble, too.
UNDERSTANDING SOCIAL WELFARE POLICY
Social Welfare Policy and the Scope of Government The growth of government has been driven by
the growth of social welfare policies, which grow generation by generation.
Democracy and Social Welfare The U.S. has the smallest social welfare system.
There is considerable unequal political participation by those that use the programs. Elderly are well-organized and influential; poor are not
ENVIRONMENTAL POLICY
ENVIRONMENTAL POLICY
Environmental Policies in America
Environmental Protection Agency: A federal agency created in 1970 Administers all the government’s
environmental legislation Administers policies dealing with toxic
wastes The largest independent regulatory agency
ENVIRONMENTAL POLICY
Environmental Policies in America (cont.)
Clean Air Clean Air Act of 1970: Groundbreaking
Expanded the federal mandate, requiring comprehensive federal and state regulations for both stationary (industrial) pollution sources and mobile sources.
1990 amendments addressed acid rain, ozone depletion and toxic air pollution
2004 EPA data show: Lead has been cut to zero
Carbon monoxide and sulfur dioxide by two-thirds
Particulates by nearly three-quarters
ENVIRONMENTAL POLICY
Environmental Policies in America
Toxic Wastes Superfund: created by Congress in 1980 to clean up
hazardous waste sites; money comes from taxing chemical products
Has virtually eliminated haphazard dumping of toxic waste, but less successful in cleaning up existing waste
Nuclear waste presents a serious challenge—Yucca Flats in Nevada as home for nuclear waste, failed for political reasons
ENERGY POLICY
Energy Sources and Energy Politics 87% of the nation’s energy comes from coal, oil,
and natural gas.
Coal is the most abundant fuel—90 percent of nation’s energy resources—but also the dirtiest.
Oil accounts for 40% of our energy, but creates a dependence on foreign (especially Middle East) sources.
The most controversial energy source is nuclear.
ENERGY POLICY
The Global Warming Gridlock
Earth is warming to between two and six degrees by 2100, due to carbon dioxide
Total costs could be $5 trillion.
United States is leading producer of carbon dioxide, but has not ratified Kyoto treaty Kyoto requires reduction in greenhouse gas emissions
to levels that would not affect the climate.
States, like California, are reducing emissions.
GROUPS, ENERGY, AND THE ENVIRONMENT
Environmental clean up is political since it puts “public” goods against other private concerns.
Explosion of groups formed to protect the environment in 1960s and 1970s.
Others oppose strict environmental laws, claiming it may hurt economy.
Policies will be controversial and expensive.
NATIONAL SECURITY POLICY
AMERICAN FOREIGN POLICY
Instruments of Foreign Policy
Three types of tools: Military: oldest and still used
Limited wars
Economic: becoming more powerful
Trade regulations, tariffs, and monetary policies
Diplomatic: the quietest of the tools
Negotiations and summits
AMERICAN FOREIGN POLICY
Actors on the World Stage International Organizations
United Nations (UN):
Regional Organizations NATO: created in 1949; combined military forces of U.S.,
Canada, and most of Western Europe and Turkey EU: transnational government composed of Western
European countries that coordinates economic policies
Multinational Corporations
Nongovernmental Organizations—groups such as Greenpeace or Amnesty International
Individuals
WAR ON TERRORISM
War on Terrorism became highest priority of George W. Bush administration after 9/11
Bush supported preemptive strikes against terrorists and hostile states.
“Axis of evil”
International relations has entered an era of improvisation
Afghanistan and Iraq
Attack against Afghanistan Taliban regime harbored Osama bin Laden and al-Qaeda network
War in Iraq Postwar planning was poor.
Public support has declined.
Terrorism beyond Afghanistan and Iraq will be difficult to combat.
POLITICS OF DEFENSE SPENDING
Defense Spending Currently takes up about one-fifth of the federal
budget
Conservatives argue against budget cuts that would leave the military unprepared.
Liberals argue for budget cuts to provide more money for programs here in the U.S.
Military spending is hard to cut since it means a loss of jobs in congressional districts.
Trend in reductions reversed after 911
TRENDS IN DEFENSE SPENDING
POLITICS OF DEFENSE SPENDING
Personnel 1.3 million active and reserve troops
More reliance on National Guard and reserve troops due to cuts in defense spending
Weapons Reliance on nuclear triad (ICBMs, SLBMs, and strategic
bombers) is expensive—$5.5 trillion
Treaties (START) signed to reduce nuclear missiles
High-tech non-nuclear weapons becoming more prevalent
Reforming Defense Policy
NEW GLOBAL AGENDA
The Changing Role of Military Power Military might is no longer the primary instrument
in foreign policy.
Losing its utility to resolve many international issues
Economic Sanctions Nonmilitary penalties imposed on foreign countries as an
attempt to modify their behavior
Generally the first resort in a crisis
Can be effective, but critics argue they only hurt U.S. businesses and provoke a nationalist backlash
NEW GLOBAL AGENDA
The International Economy Interdependency: mutual dependency in which the
actions of nations reverberate and affect one another’s economic lifelines
International Trade Tariffs: a tax on imported goods to raise the price,
thereby protecting American businesses and workers NAFTA and GATT are ways to lower tariffs and increase
trade. Congress approved the Central American-Dominican
Republic Free Trade agreement in 2005.
Balance of Trade Ratio of what is paid for imports to what is earned for
exports
WAR POWERS ACT OF 1973
All commitments of troops in hostile situations must be reported within forty-eight hours
Only a sixty-day commitment of troops can be made unless there is a declaration of war or a specific statutory authorization
Every president since the passage of the War Powers Act has sent troops abroad without congressional approval
Presidents deny that the War Powers Act is constitutional