Transcript File

Unit 6: Public Policy
AP US Government
Presentation Outline
1)
2)
3)
4)
Economic Policymaking
Social Welfare Policymaking
Healthcare and Environmental Policy
National Security and Foreign Policy
1) Economic Policymaking
Government, Politics, and the
Economy
• Introduction
– Capitalism:
• An economic system in which individuals and
corporations, not the government, own the principle
means of productions and seek profits.
– Mixed Economy:
• An economic system in which the government is deeply
involved in economic decisions through it role as
regulator, consumer, subsidizer, taxer, employer and
borrower.
– Multinational Corporations:
• Businesses with vast holdings in many countries.
Government, Politics, and the
Economy
• Economic Policy at Work: An Illustration
– Wal-Mart is the world’s largest company.
– Government Regulation and Business Practices
• Securities and Exchange Commission regulates
stock fraud.
• Minimum wage: The legal minimum hourly wage
for large employers.
• Labor union: An organization of workers intended
to engage in collective bargaining.
• Collective bargaining: Negotiations between
labor unions and management to determine pay
and working conditions.
Government, Politics, and the
Economy
– Wal-Mart and the World Economy
• Wal-Mart epitomizes America’s imbedding in the
world economy.
• The proportion of U.S. GDP accounted for by
international trade is 30%.
• Wal-Mart takes full advantage of “comparative
advantage.”
• Offshore outsourcing is a key concern of the new
global economy.
Outsourcing
Government, Politics, and the
Economy
• “It’s the Economy, Stupid”: Voters,
Politicians, and Economic Policy
– Economic trends affect who the voters vote
for.
– Economic conditions are the best predictor of
voters’ evaluation of the president.
– Republicans worry about inflation.
– Democrats stress importance of
unemployment.
Government, Politics, and the
Economy
• Two Major Worries: Unemployment and
Inflation
– Unemployment rate: Measured by the BLS,
the proportion of the labor force actively
seeking work, but unable to find jobs.
– Inflation: The rise in prices for consumer
goods.
– Consumer Price Index: The key measure of
inflation that relates the rise in prices over
time.
Government, Politics, and the
Economy
• Unemployment: Joblessness in America, 1960-2002 (Figure
17.1)
Government, Politics, and the
Economy
• Inflation: Increases in the Cost of Living, 1960-2002 (Figure
17.2)
Policies for Controlling the
Economy
• Monetary Policy and “the Fed”
– 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.
– Main policymaker is the Board of Governors
of the Federal Reserve System – the “Fed.”
Policies for Controlling the
Economy
• 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
– Through the use of these actions, the Fed can
affect the economy.
Policies for Controlling 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
spending and deficits help the economy
weather its normal ups and downs.
– Government’s job is to increase demand of
goods.
Instruments for Controlling the
Economy
• Fiscal Policy of Presidents and Parties,
continued
– Supply-Side economics: The policy that
says there is too much taxation and not
enough money to purchase goods and
services.
– Reduce taxation and government regulation
then people will work harder, and thus create
a greater supply of goods.
Politics, Politics, and the
International Economy
• Protectionism: The economic policy of
shielding an economy from imports.
• World Trade Organization (WTO): The
international organization that regulates
international trade.
• Free trade is controversial as jobs have
increasingly been outsourced.
Arenas of Economic
Policymaking
• Business and Public Policy
– Corporate Corruption and Concentration
• Increased incidence of bankruptcy and
scandals.
• Increased number of corporate mergers
• Antitrust policy: A policy designed to ensure
competition and prevent monopoly.
Arenas of Economic
Policymaking
• Business and Public Policy, continued
– Regulating and Benefiting Business
• Congress has taken steps to regulate
accounting industry practices.
• The Securities and Exchange Commission
regulates stock fraud
• Government may loan businesses money.
• Government collects data that business use.
Arenas of Economic
Policymaking
• Labor and Government
– Government historically sided with business over
labor unions.
– NLRB: regulates labor-management relations
– The Taft-Hartley Act (1947) continued to guarantee
unions the right of collective bargaining, but prohibited
various unfair practices by unions.
– Government now provides unemployment
compensation and a minimum wage.
Understanding Economic
Policymaking
• Democracy and Economic Policymaking
– Voters expect more of politicians that they can
control.
– Sometimes economic theory and democratic
theory may be at cross purposes.
– It is difficult to make decisions that hurt groups or
involve short-term pain for long-term gain.
• Economic Policymaking and the Scope of
Government
– Liberals tend to favor more government
involvement in the economy.
– Conservatives tend to favor less government
involvement in the economy.
2)Social Welfare
Policymaking
What is Social Policy and Why is it
so Controversial?
• Social welfare policies provide benefits to
individuals, either through entitlements or
means-testing.
– Entitlement programs: Government benefits
that certain qualified individuals are entitled to
by law, regardless of need.
– Means-tested programs: Government
programs only available to individuals below a
poverty line.
Income, Poverty, and
Public Policy
• Who’s Poor in America?
– Poverty Line: considers what a family must
spend for an “austere” standard of living.
– In 2003 the poverty line for a family of three
was $14,824.
– Many people move in and out of poverty in a
year’s time.
– Feminization of poverty: high rates of poverty
among unmarried women
Income, Poverty, and Public Policy
• Poverty Rates by Race and Hispanic Origin: 1959-2003 (Figure
18.1)
Income, Poverty, and
Public Policy
• What Part Does Government Play?
– Taxation.
• Progressive tax: people with higher incomes pay
a greater share.
• Proportional tax: all people pay the same share
of their income.
• Regressive tax: opposite of a progressive tax
• Earned Income Tax Credit: “negative income tax”
that provided income to very poor people.
Helping the Poor? Social Policy
and Poverty
• “Welfare” as We Knew it
– Social Security Act of 1935 was the first
major step by the federal government to help
protect people against absolute poverty.
– The Social Security Act set up 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? Social Policy
and Poverty
• “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.
Living on Borrowed Time: Social
Security
• The New Deal, the Elderly, and the
Growth of Social Security
– Social Security has grown rapidly since
1935, adding Medicare in 1965.
– Employers and employees contribute to
the Social Security Trust Fund.
– The Trust Fund is used to pay benefits.
– The ratio of workers to beneficiaries is
narrowing. The Trust Fund will soon be in
the red.
Living on Borrowed Time: Social
Security
• The Future of Social Security
– The number of Social Security contributors
(workers) is growing slowly, the number of
recipients (retired) is growing rapidly.
– At some time, payouts will exceed income.
– Solutions of cutting benefits or raising taxes
are hard choices.
– Republicans favor privatizing Social Security.
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.
– The American social welfare system grows
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.
3) Health Care and
Environmental Policy
Health Care Policy
• Uneven Coverage, Uneven Care
– Health Insurance
• About 43 million Americans have no health
insurance.
• Often linked to having a job - lose the job, lose the
health insurance.
• Health insurance is closely tied to race and
income.
Health Care Policy
• The Role of Government in Health Care
– Government in the United States has the
smallest role.
– Medicare: provides hospitalization insurance
for elderly and optional coverage for other
medical expenses.
– Medicaid: public assistance program to
provide health care for the poor. Paid for by
national and state governments.
Health Care Policy
• Policymaking for Health Care
– The Politics of Health Care
• Equality of care and cost containment take a back
seat to technological advance.
• Interest groups (medical profession, elderly,
business, insurance companies) play a major role
in health care policy making.
Health Care Policy
• Policymaking for Health Care
– The Clinton Heath Care Reform Plan.
• Main concern guaranteeing health care coverage for all
• Paid for by requirement for employer insurance and tax
increases
• Health alliances would collect premiums, bargain with health
plans, and handle payments.
• Interest groups lobbied hard against this bureaucratic and
complicated plan.
• Eventually died in Congress.
Environmental Policy
• Environmental Policies in America
– Environmental Impacts.
• Environmental Impact Statements: report that
specifies likely environmental impact of a proposed
action - filed with the EPA.
• Used by environmental groups to challenge and
delay projects they object to.
– Clean Air.
• Clean Air Act of 1970: reduce auto pollution.
• 1990 amendments allowed emissions trading.
Environmental Policy
• Environmental Policies in America
– Clean Water.
• Water Pollution Control Act of 1972: intended to
clean up the nation’s rivers and lakes requiring the
use of pollution control technology.
• Has helped reclaim numerous rivers and lakes
since its passage.
• But it misses “runoff” pollution from city streets and
other areas.
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, but also the
dirtiest.
– Oil accounts for 40% of our energy, but
creates a dependence on foreign (especially
Middle East) sources.
– Most controversial energy source is nuclear.
Energy Policy
• The Global Warming Debate Heats Up
– Scientists argue about the effects of
accumulations of carbon dioxide in the
atmosphere.
– The only way to reduce the problem is to
reduce the amount produced.
– The costs to do this are immediate, but the
effects won’t be visible for decades, if ever.
Understanding Health Care and
Environmental Policy
• The Scope of Government and Health
Care and Environmental Policy
– As citizens want more health care reform, the
size of government will increase.
– Increased environmental protection will also
cause the size of government to go up.
– With party divisions, incremental change is
most likely.
4) National Security and
Foreign Policy
American Foreign Policy:
Instruments, Actors, and
Policymakers
• Instruments of Foreign Policy
– Three types of tools:
• Military
• Economic
• Diplomatic
– Military is the oldest and still used
– Economic is becoming more powerful
– Diplomatic is the quietest of the tools
American Foreign Policy:
Instruments, Actors, and
Policymakers
• Actors on the World Stage
– International Organizations (UN)
– Regional Organizations (NATO, EU)
– Multinational Corporations
– Nongovernmental Organizations
– Individuals
American Foreign Policy:
Instruments, Actors, and
Policymakers
• The Policymakers
– The President
– The Diplomats (secretary of state)
– The National Security Establishment
(secretary of defense, Joint Chiefs of Staff,
NSC, CIA)
– Congress
American Foreign Policy:
An Overview
• Isolationism:
– Foreign policy where the U.S. tries to stay out
of other nation’s conflicts, particularly in
Europe.
• Monroe Doctrine:
– U.S. official statement of isolationism
• World War I:
– Ended isolationism for a few years and then
the U.S. returned to isolationism in the 1920s
and 1930s
American Foreign Policy:
An Overview
• The Cold War
– Containment Abroad and Anti-Communism at
Home
– The Swelling of the Pentagon (arms race)
– The Vietnam War
American Foreign Policy:
An Overview
• The Era of Détente
– Détente: a slow transformation from conflict to
cooperation
– Strategic Arms Limitations Talks: effort to limit
the growth of nuclear arms
– Originally applied to the Soviet Union, and
then to China
– Not favored by everyone
American Foreign Policy:
An Overview
• The Reagan Rearmament
– Defense budget had been declining since the
mid-1950’s.
– Reagan added some $32 billion to the
defense budget in his first term in office to
oppose the Soviet buildup.
– Strategic Defense Initiative: using computers
and other equipment to defend against Soviet
missiles from space (“Star Wars”).
American Foreign Policy: An
Overview
• The 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.
– International relations has entered an era of
improvisation.
The Politics of Defense Policy
• 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.
The 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) are used to protect
American business.
• NAFTA and GATT are ways to lower tariffs and increase
trade.
– Balance of Trade: The ratio of what is paid for imports
to what is earned for exports.
The New Global Agenda
• The International Economy (continued)
– Energy
• America depends on imported oil, but not as much
as other nations.
• Much of the recoverable oil is in the Middle East
which is often the site of military & economic
conflicts.
• OPEC controls the price of oil and amount its
members produce and sell.
Understanding National Security
Policymaking
• National Security Policymaking and
Democracy
– Americans are more interested in domestic
than foreign policy.
– The opinions of the people are rarely ignored.
– Pluralism is pervasive in foreign policymaking.
• Foreign and Defense Policymaking and
the Scope of Government