Download 2 nd Hour Chapter 17 Economic Policymaking Study Guide

Study Guides – 2nd Hour
Chapter 17
Economic Policymaking Study Guide
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Who was the father of the American economy?
o Alexander Hamilton
What responsibility does The National Bureau of Economic Research have?
o Declaring when the nation is in recession
When does a recession occur?
o When the economy experiences two consecutive quarters of negative growth.
What is it called when the government is deeply involved in the economy, but doesn’t command it?
o Mixed economy
Wal-Mart is an example of what kind of corporation? Why?
o A multinational corporation because they have vast holdings in many countries
Why was the Securities Exchange Creation created?
o In order to investigate stock fraud
How is the American government involved in the economy?
o It regulates stock transactions and provides a minimum wage.
What does monetary policy refer to?
o the manipulation of the supply of money and credit in private hands to promote economic health
How does the Federal government control money supply?
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How is minimum wage influenced by the actions of federal government?
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It can buy and sell government securities in the market, thereby either expanding or contracting
money supply.
Minimum wage is not influenced by the actions of the Fed. Government. Inflation, unemployment
rate, money supply and commercial interest rates are.
The Democratic economic icon is?
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Franklin Roosevelt
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The Republican economic icon is?
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Who is associated with the saying “government is not the solution to our problem; government is the problem”?
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What were President Reagan’s economic policies?
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Ronald Reagan
Ronald Reagan
Supply-side economics in which tax cuts and deregulation are designed to free funds for savings and
investment
What caused the Great Depression?
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The 20% hike in U.S. tariffs, known as Smoot-Hawley
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What was the Sherman Act of 1890 designed to do?
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The American government has supported the creation of what in order to promote free trade?
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Why did the Clinton administration file a lawsuit against Microsoft?
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Ensure competition and prevent corporate monopolies
Free trade agreements and free trade zones and the World Trade Organization
They believed that Microsoft violated antitrust regulations
Chapter 18: Social Welfare Policy-Making
Vocabulary:
Social Welfare – provide benefits to individuals through entitlements or means testing
The government notoriously spends more money on the poor through social welfare policies than the rich.
Entitlement Programs – benefit provided by law regardless of need (also called social insurance programs)
Ex. Social Security, Medicare (More government spending goes here)
Means-tested Programs – benefits available only to those who qualify based on specific needs
Ex. Medicaid, Food Stamps
Income Distribution – share of national income earned by various groups
Income – amount of funds collected between any two points in time
Wealth – value of assets owned (stocks, bonds, bank accounts, cars, houses, etc.) – very unequally distributed
Wealth distributed into thirds between top 1% of pop, middle 9%, and bottom 90%.
Feminization of Poverty – increasing concentration of poverty among women, especially those unmarried with children.
Progressive Tax – government takes a greater share of income from the rich than of the poor.
Ex: Rich pay 50% of income taxes, poor pay 5% (Similar to the federal income tax)
Proportional Tax – government takes the same share of income from everyone (both rich and poor)
Ex: Both a rich family and a poor family each pay 20%
Regressive Tax – government takes a higher percentage of income from low income than the wealthy
Ex. 50% of poor family’s income and rich pay 5% (Similar to sales tax increases with income increase)
Transfer Payments – benefits given by the government directly to individuals in the form of cash (social
security and retirement payments) and in-kind transfers (food stamps and low interest college loans)
Proposition 187 – (Save Our State) approved by California in 1994 cut off public services for illegal immigrants.
Social Security Act of 1935 - passed during the Great Society Era after President Lyndon Johnson declared a “War on Poverty”
in order to create social welfare policy initiatives. These initiatives were later attacked and received major funding cuts due to
President Ronald Reagan.
Social Security programs have since greatly succeeded mainly because they work. It was the ‘deal that couldn’t be beat”. Some
government officials propose sending a portion of Social Security contributions to a private retirement fund. Politicians are
reluctant to reform Social Security because they seek to avoid blame for any possible failures, and since older Americans vote
at a higher rate than younger Americans, they fear a backlash from older voters.
Table 18.1 for the distribution of income in America Table 18.2 for major social welfare programs and funding.
Chapter 19 Healthcare & The Environment
1) Healthcare Policy
a) America’s healthcare differs greatly from other nation’s; no gov’t run healthcare system
b) Expensive healthcare in America; relatively low health though
c) Most people (60%) get healthcare through HMOs (Health Maintenance Organization)
i) Most common means of access to health care in the United States is Private insurance plans
ii) Americans spend 2.3 billion per year on Healthcare
iii) Infant mortality rate in the US ranks 18th among the world’s developed nations; it is higher than expected
iv) Health care for a yearly fee w/limited choice of doctors + treatments
v) 46 million Americans w/out health insurance
(1) Most uninsured are < 65
vi) More money one has = increased insurance/ costs 1/7 (15%) of America’s G.D.P
2) Gov’t Role in Healthcare
a) U.S has most privatized medical care system in the world
b) Nation, State, local gov’ts pay for 46% of total health bill
c) Truman proposed national health insurance, compulsory insurance program, but it was never accepted
d) 1965—Congress adopted Medicare: part of Social Security system that provides hospitalization insurance + inexpensive
coverage for elderly Americans
e) Medicare fund is running out; costs rising
f) Medicaid: public assistance program providing health care to poor Americans, funded by state + national gov’t
3) Policymaking for Health Care
a) Influenced largely by powerful lobbying organizations
b) Elderly is one of the most powerful voting/lobbying forces (American Association of Retired Persons (AARP))
c) Business is in conflict w/gov’t over the burden of Healthcare
d) Democrats & Republicans differ greatly on Healthcare
i) Democrats want gov’t to subsidize drugs + control = Republicans want private plans for acquiring drugs
ii) Medical rationing is prevalent in America’s Healthcare system
4) Environmental Policy
a) Environmental protection wasn’t an issue until the 1960s
b) Environmental Protection Agency (1970) administers much of the US environmental policy; largest federal independent
regulatory agency
c) Clean Air Act of 1970 charged the Department of Transportation with combating automobile emissions/pollution
i) In 1990, congress passed and reauthorized the act making it stronger
d) Water Pollution Act of 1972 requires polluters to use pollution control technology and secure permits from the EPA to
discharge waste in waters
e) Since 1916, US has been a world leader in wilderness preservation
f) Endangered Species Act of 1973 requires the Fed. Gov’t to protect endangered species
g) Superfund created in 1980 to clean up toxic waste; money comes from taxing chemical products
i) Virtually eliminated dumping, less successful in cleaning up existing waste
5) Energy Policy
a) 87% of US energy comes from coal, oil, + natural gas
i) Coal is most abundant; estimated 90% of US energy resources in coal deposits
ii) Oil is 40% of America’s energy; we have 2% of world’s oil
b) US is leading producer of CO2; about 23% of the world’s CO2 generated in US
c) Global Warming is a hot political issue
i) People who oppose reducing emissions claim it will cost too much (Bush)
6) Summary
a) Biggest policy difference between US and all other industrialized countries is in the Healthcare
b) Healthcare makes up 1/7 (15%) of our GDP; projected to 20% in 2015
i) US spends more national income on Healthcare than other nations and is still unhealthy
ii) Americans are concerned w/environment; US is reliant on fossil fuels and 60% of our oil comes from other nations
Chapter 20: National Security Study Guide
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What is foreign policy?
o Realm of policy concerned with relations with the rest of the world.
Where has military influence of the United States historically been centered?
o Central America and the Caribbean.
What is diplomacy?
o The process by which nations carry on relations with each other.
Regional organizations
o Military-based
 NATO
o Economy-based
 European Union
Executive agreements
The State Department
o Foreign policy arm of the United States
Central Intelligence Agency
o Role – Gathering and interpreting intelligence about foreign countries
The power to declare war rests with ________?
o Congress
Isolationism
o United States should stay out of European affairs.
The Monroe Doctrine
o European countries stay out of Latin America.
Who coined the term “Iron Curtain?”
o Winston Churchill
Containment
o Stop the spread of Communism.
Détente
o Shift in American policy towards less tension with Communists.
One of the oldest instruments of foreign policy is:
o War and the threat of war.
War is “the continuation of politics by other means.”
International Organizations
o United Nations
 Security Council
Joint Chiefs of Staff
o Hawkish military advice has come from Navy.