Domestic Policy PP
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Transcript Domestic Policy PP
Domestic Policy
Policy Areas
(Economic, Business,
Environment, Health
Care)
Economic Policy
2 Types of Economic Policy:
Fiscal: taxing/spending considerations (Conducted by
Congress/President)
Monetary: regulation of money supply by “the Fed” (adjust
interest rates)
Developments in economic policy:
Industrial Revolution’s excesses led Congress to make greater use
of regulatory powers (e.g., breaking up trusts, regulating meat and
drugs, regulating rates of the R.R.)
Great Depression led to greater regulation of economy
(unemployment, bank failures demanded aggressive action)
Economic Approaches
Keynesian economics (John Maynard Keynes)
Gov’t can manipulate the economy through spending;
Increase spending in hard times to stimulate the
economy; decrease in good times
Supply-Side economics (Reagan ‘81-’89)
Cuts in taxes will produce business and individual
investment which will compensate for lost tax revenue
(Reagan cuts taxes, but increased spending)
Monetarism (The Fed)
Monetary policy; not fiscal policy is most important for
guiding economy of nation; control of money supply through
adjustment of interest rates stimulate or tightens spending
Modern Developments
Push for balanced budget amendment (GrammRudman; 1985)
“Paygo” passed in the early 1990’s (Clinton)
Expiration of “paygo” and war on terrorism in early
2000’s leads to huge budget deficits
Trade policy
Increasing trade deficits (China; Rising oil prices)
Outsourcing of jobs (loss of U.S. jobs)
Push for free trade; rather than for tariffs
• NAFTA
• CAFTA
Regulation
Antitrust policies in early 20th C. designed to break up monopolies
and restore competition. (Standard Oil controlled 90%)
Recent Developments
Less regulation during Reagan/Bush
Corporate mergers have exploded to be competitive w/ foreign
competition (e.g, AOL Time-Warner)
Collapse of subprime mortgage has led to call for re-regulation
Arguments For
Working conditions; safety of products; eliminate bribery
Protects consumers/workers; protects those w/o “voice”
Arguments Against
Markets will work for benefit of consumers; kills jobs; increase in prices
Deregulation
Airlines
Regulated before 1978; controlled rates/fares
Congress deregulated industry by allowing competition
• Some airlines could not compete
• Smaller cities lost service
• Airlines cut services/but lowered fares
Telecommunications
Telecommunications Act of 1996
• Companies could offer all services (phone, cable, internet)
• Provided for regulation of internet content (struck down by S.C.)
• Allowed for V-chip controls for parents
Evaluation
Restores competition?
Encourages innovation
Lower prices for consumers
Problem: Companies have to deal w/ state regulations that may be different
Environmental Policy
Environmental policy affected by federalism
Key issue: Extent of protection vs. costs of protection (competing
interests)
Key legislation
National Environmental Policy Act (1969); Air Quality Act(1967); Clean
Water Acts (1970’s); EPA (1970); Superfund (1980)
Three types of policy
Entrepreneurial (Clean Air Acts; only businesses or state pays cost)
Majoritarian (Increase in gas tax; everyone benefits)
Client Group (Superfund; ANWAR; people pay; oil companies benefit)
Question: Which type of policy is Endangered Species Act? (Spotted
Owl vs. Logging)
Health Care
Private health care
Problems
Traditional approach: fee for service; paid for by insurance
HMO’s: health maintenance organization
Rising costs, uninsured, high cost of malpractice, paperwork,
unnecessary procedures, lack of flexibility
Reforms
Single payer (socialized medicine), requiring coverage by
employers or require people to buy health insurance
Competition across state lines (Conservative)
Voucher system (Paul Ryan)