Government Test Five

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  1. public policy
    an intentional course of action by government to deal with some problem or concern
  2. Stages of the Public Policy Process:
    • 1. Problem Recognition and Definition 5. Budgeting - can fund or de-fund policies
    • 2. Agenda Setting - prioritizing issues 6. Policy Implementation - execution
    • 3. Policy Formulation - mulling the ideas 7. Policy Evaluation - did it work?
    • 4. Policy Adoption - by political process
  3. social welfare policy
    government programs designed to improve quality of life
  4. Different Kinds of social welfare policies
    • � Income Security - gov't. activity started with the Depression and FDR's New Deal
    • � Health Care - paid for with private insurance, Medicare and Medicaid
    • � Public Education - local, state, and federal funding; "equalization"
  5. Social Security Act
    1935 law est. old-age insurance; public assistance for children, the poor, and others; and unemployment insurance
  6. entitlement programs
    all those meeting eligibility criteria are "entitled" to the $; also require "mandatory" spending: funds must be provided if no change in law
  7. poverty level
    federal measurement; in 2009, $22,050 annual income for a family of four
  8. why people are poor
    unemployment, lack education/skills, bad work habits; disability, drug use, mental illness; child of poor parents, illegitimacy, divorce
  9. means-tested programs
    • help those with income below a designated level
    • * Supplemental Security Income (SSI) - $ to disabled needy people
    • * TANF (Temporary Assistance for Needy Families); $164 - $500 + per month
    • * Earned Income Tax Credit (EITC) - subsidizes low-wage workers; politically popular
    • * Food Stamps - subsidize both the poor and farmers; run by the Agriculture Dept.; also WIC (women, infants, & children), school lunches & breakfasts
  10. Welfare Reform (1996)
    AFDC had seemed to encourage illegitimacy and dependency, and help create a permanent underclass; so, AFDC was replaced with TANF: added work requirements, 5-yr. lifetime limit on aid
  11. non-means-tested programs
    • provided regardless of income level (everyone can get it)
    • * Social Security - for seniors, 65+ (and survivors and disabled); max $2,323 per month, funded with 12.4% payroll tax (paid - by employer, - by employee)
    • * Unemployment - weekly payments for unemployed workers; states manage, avg. pay from $235 (MS) to $641 (RI) per week; funded with 1-10% payroll tax on employer
  12. Social Security Trust Fund
    not individual accounts, but a federal "fund" holding IOUs; in 2016, SS will start paying out more $ than it takes in, in 2037 it'll be bankrupt
  13. ways to save social security
    tax hikes, benefit cuts, later retirement, means-testing, private accounts
  14. Medicare
    for those receiving SS benefits (65+)(non-means tested); drug benefit added in 2003; funded with 2.9% payroll tax (half and half), but bankrupt by 2017 {health care for old people/seniors}

    • Medicaid
    • for needy (means-tested) under TANF and SSI; states manage; pay for families under 133% to 185% of poverty level {health care for poor people/needy}
  15. health care costs
    rose dramatically ca. 1990 and 2000-today; public spending has also jumped in those periods (see Figs. 17.3 & 17.4); Medicaid is eating up state budgets
  16. uninsured
    up to 45 million, or 15% of US; by un- or under-employment, youth, choice, pre-existing conditions
  17. potential health care reforms:
    • * single-payer system - government provides insurance for private health care services
    • * single-provider system - government-run health care, as in Canada, Great Britain; aka "socialized medicine", veterans
    • * mandatory health insurance coverage - to be required in Massachusetts by July, 2007; subsidized, goal to create near-universal coverage, personal mandate
    • * market reforms - expanded HSAs, tax breaks, more flexible regulations to encourage more competition
  18. Public Education
    • spending inequalities - since - funded with property taxes; states use equalization plans
    • competition - through:
    • * voucher plans (e.g., Milwaukee, Cleveland) - can help the poor escape bad schools; opposed by teachers' unions, liberal groups, wealthy suburbanites; upheld by S.C.
    • * charter schools - provide an alternative to standard schools; free of many regulations; some 800 now in 23 states & D.C. for over 165,000 students
  19. economic stability
    growth, rising incomes, "full" employment, and low inflation
  20. inflation
    general rise in prices; caused by scarcity of goods or too much $ in circulation
  21. Recession
    a short-term decline in growth: investment and production fall, and unemployment grows; technically, two straight quarters of negative GDP growth
  22. GDP (gross domestic product)
    total value of all goods and services produced
  23. business cycle
    regular expansion and recession of modern market economies
  24. laissez faire
    "leave alone" policy; calls for limited government role in the economy, allowing free markets; the "unseen hand"
  25. 1930s interventionism
    government takes an active role in the economy; financial reforms (banking, securities, etc.), agriculture, labor, industrial regulations
  26. regulations
    economic and social (including environmental) expanded in 1960s, '90s; regulation generally slows, channels economic activity
  27. deregulation
    in 1970s and '80s, most actively under Reagan; by laws and exec. orders
  28. If you want more, subsidize it; if you want less, tax it.
  29. Monetary Policy
    control of the national money supply and interest rates
  30. effects of the monetary policy
    low interest rates spur growth; high rates stunt growth {loose money can cause inflation, improve trade balance}
  31. Federal Reserve Board (FRB, or "The Fed")
    adjusts the money supply: sets the discount rate and member banks� reserve requirements; 7 members w/14-year terms
  32. Alan Greenspan
    very respected and successful Fed Chairman (1987 - 2006)
  33. Keynesianism
    gov't. spending or tax cuts put new money into the economy to increase growth; tax increases, spending cuts can slow the economy, inflation; "demand" side
  34. Supply-side ("classical") economics
    lower marginal tax rates encourage work, production, investment, and thus employment; tax cuts may not cut revenues
  35. Laffer curve
    shows how, at some point, high tax rates start to shrink revenues
  36. "Rubenism"
    1990s CW in D.C.; small deficits/surpluses lower interest rates, thus help the economy grow; taxes are OK if they balance the budget; but no correlation
  37. trade is good; free trade helps all national economies, but can lead to dislocations in some industries; pros and cons
  38. NAFTA
    North American Free Trade Agreement (1993), among US, Mexico, Canada
  39. WTO
    World Trade Organization (1995), leads negotiations to lower tariffs
  40. Protectionism
    trade limits; can temporarily prop up sick industries (but not for long)
  41. Office of Management and Budget (OMB)
  42. est. 1921; prepares president�s budget; often trims agency requests
  43. Congressional Budget Office (CBO)
    est. 1974; reviews, reports budget to House and Senate; made Congress less dependent on OMB
  44. authorization
    first Congress has to vote to authorize the spending of money
  45. appropriations
    then Congress votes to have the government actually spend the money; usually 13 appropriations bills are passed each year for the federal budget
  46. continuing resolutions
    allows agencies to operate at last year's budget levels until new appropriations bills can be passed
  47. Budget Act of 1974
    Congress (the spenders) gave itself more power in the budget process; created CBO; larger deficits have been the rule since then
  48. Deficit
    budget shortfall in one fiscal year
  49. surplus
    budget overage in one fiscal year
  50. Debt
    sum of budget deficits (- surpluses) over all years; bad if it grows as % of GDP
  51. baseline budgeting
    starts from next year's presumed growth, not this year's spending; no increase or an increase below that "baseline" is called a budget "cut"
  52. A Tax and Budget Summary, 1970s - 2010
    • Recession Economy Taxes Spending Events Deficits
    • 1970s 1974, '80 Stagflation Creep up Grows Malaise Grow
    • 1980s 1981-82 Boom Cut, '81 Grows Big Cold War Grow Big
    • 1990s 1990-91 Boom, esp. stocks Raised, '90 & 93; cut �96 Shrinks Market boom/bubble Shrink; surpluses
    • 2000s 2000-01
  53. 2009 Boom
  54. Housing bust, big banks fail Cut, '01, '03
  55. Increases proposed Grows Big
  56. Explodes Afghan, Iraq wars, terrorism
    Financial meltdown Grow Big
  57. Explode
    2010s Slow growth Cuts expire, new taxes Stays Big Obamacare Massive
  58. Spending drives deficit
  59. Growth limits debt % of GDP
  60. Isolationism
    policy to avoid participation in foreign affairs
  61. Internationalism
    policy of active participation in foreign affairs; stronger since WWII
  62. Unilateralism
    policy to act without consulting (many) other nations
  63. multilateralism
    policy to cooperate, consult with other states before acting
  64. Tariffs
    taxes on imports to raise funds and protect domestic industries
  65. Monroe Doctrine
    1823 pledge to oppose any European expansion into the Western Hemisphere; Roosevelt Corollary stated US responsibility for stability
  66. manifest destiny
    idea that the US was divinely mandated to expand to the Pacific
  67. collective security
    if one country is attacked, all others come to its defense; the premise behind the League of Nations, the UN, NATO, etc.
  68. United Nations (UN)
    global organization for collective security, global well-being
  69. IMF
    International Monetary Fund; stabilizes exchange rates among major currencies
  70. World Bank
    provides loans for large development projects; aid is conditional
  71. The Cold War (1947-1990)
  72. USSR
    Union of Soviet Socialist Republics, Soviet Russia (1917-1992); �Red Army�
  73. Iron Curtain
    armed borders of communist countries: walls to keep people in, not out
  74. Containment
    opposition to expansion of Soviet power, esp. in Europe and Asia; NSC-68
  75. NATO
    North Atlantic Treaty Organization (1950); collective security for W. Europe
  76. Communist "Red" China (1949-now)
    Mao Zedong's forces def. Chaing�s Nationalists
  77. hot wars
    (US {and soviets} troops fight) Korea (1950-53), Vietnam (1954-75),Grenada (1983)
  78. skirmishes (US {and soviets} funds surrogates)
    Iran, Cuba, Africa (many), Afghanistan (1979-87), Nicaragua, El Salvador
  79. Cuban Missile Crisis (1962)
    • Soviets tried to deploy IRBMs in Cuba; Kennedy blockade Cuba, threatened invasion; Krushchev backed off, and took the missiles out; nearest we've ever come to a nuclear war
    • D'tente
    • relaxation of tensions between US and USSR in the 1970s; marked by . . .
  80. (nuclear) arms control
    SALT, SALT II (defeated in Senate, 1979), START talks
  81. Strategic Defense Initiative (SDI)
    Reagan's missile defense, bypassed '72 ABM Treaty
  82. Deterrence
    military response capabilities that prevent enemies from attacking; e.g. MAD{mutual assured destruction
  83. cold=don't actually fight - verbal war. Hot=fought through surrogates - not them but people supported by us or them
  84. president
    pre-eminent in foreign and military policy; centralizes information, authority; can act quickly and decisively
  85. State Department
    chief foreign policy bureaucracy; "Foggy Bottom"
  86. Department of Defense (DoD)
    military bureaucracy, in Pentagon; heads armed forces
  87. Central Intelligence Agency (CIA)
    collects and analyzes information and intelligence about foreign countries and events; gets data from DIA, NSA, etc.
  88. National Security Council (NSC)
    advises president on foreign and military affairs
  89. Dept. of homeland Security (DHS)
    created after 9/11 to coordinate domestic US security efforts against terrorism
  90. Congress
    agenda-setting, oversight, approves treaties & ambassadors (Senate), appropriations; passed War Powers Act, restrained CIA in 1970s
  91. non-governmental organizations (NGOs)
    promote development, lobby for foreign policy positions, actions: e.g. Amnesty International, Int�l. Red Cross, Greenpeace
  92. allies
    most significant (militarily) are Great Britian, Israel, Key western democracies
  93. "Israelism"
    radical Muslim agenda to destroy the West & infidels, esp. Jews
  94. three kinds of radical movements:
    • * Islamist Shia - ruling mullahs of Iran (1979-); took US Embassy hostages, fund Hezbollah, Iraq's al Sadr, many other terrorist groups
    • * Islamist Sunni - esp. Wahabbist fundamentalists: anti-modern, global, Saudi-funded
    • * fascist Baathists - Assad's Syria, Saddam Hussein's Iraq; totalitarian thugs
  95. America's Foreign Wars
    • Years US Name of War; Causes, Why Fought;
    • Involved - President Results
    • 1991 Gulf War Iraq invasion of Kuwait, threat to Saudi oil fields
    • - Bush 41 Saddam expelled from Kuwait, survives; Saudis defended
    • 2001-now Afghan War 9/11 attacks; attempt to destroy al-Qaeda (�the base�)
    • - Bush/Obama Taliban destroyed; bin Laden escapes
    • 2003-09 Iraq War Iraqi aggression, WMD, terrorist ties, failed attrition
    • - Bush Saddam deposed; insurgency, first Arab democracy
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Government Test Five
2010-04-26 20:39:00
Government Test Five

Government Test Five
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