Download Chapter 19 APUS Notes

Chapter 19 APUS Notes
Making Economic and Regulatory Policy
1. The Process:
a. Problem Identification
b. Policy Formulation Policy Adoption
c. Policy Implementation
d. Policy Evaluation
e. What doe this remind you of?????
2. Economic Policy
a. Fiscal Policy-Federal spending and taxation to stimulate the economy
b. Monetary Policy- manipulating the money supply
c. Inflation
3. The Federal Budget- Where does the money come from:
a. Tariffs
b. excise taxes
c. Individual income tax (progressive tax)
d.
Corporate income tax (regressive tax)
e. Payroll taxes
f. Borrowing…deficits…national debt
g. GDP
h. Entitlements
4. The Budget Processa. Executive Branch- OMB
b. Legislative Branch- Congressional Budget Office (CBO)
c. Sales Taxes (tax at point of sale) versus Value Added Taxes (VAT) tax on
the increased value of a product at each stage of production and
distribution...not just at point of sale.
d. Tax expenditures- Loss of tax revenue due to deducts on taxes…ie.credit
for hybrid cars on your income tax.
5. Monetary Policy
a. The Fed…Our national bank- 12 regional banks -Board of GovernorsChairman and 6 members- Federal Open Market Committee-decides how
the money supply should look- more or less in circulation
b. The two different economic approaches- laissez-faire / Keynesian
c. Trade- Trade deficit / WTO (World Trade Organization)/ GATT ( General
Agreement on Tariffs and Trade)
d. NAFTA- North American Free Trade Agreement / Protectionism
6. Regulations…The Jungle / Silent Spring / Unsafe At Any Speed
a. Economic
b. Social
c. Business- monopolies / Trusts/ Antitrust legislation/ Sherman and
Clayton/ Microsoft????
d. Labor- Public Contracts, Wages and Hours, Child Labor, Safety and
Health…Yellow Dog Contracts- Closed and Open shops- Union Shopslabor injunctions- collective bargaining
e. Markets
f. The Environment- impact statement
g. Deregulation- Natural gas, electricity, cable, airlines
h. Regulation distorts and disrupts the operation of the market, Discourages
competition, Discourages technological advances, often captured by the
very industries they are trying to regulate, increase costs, no cost-benefit
analysis, lack qualified personnel