Public Policymaking
AP Mini-Unit 6
The U.S. Economy
Economy has a profound impact on public policy and public opinion
Free enterprise system - economic system where consumers have buying choices and compete in the market to make profits
U.S. has a mixed economy = free enterprise + federal gov’t regulation of economy
Economic Troubles
Unemployment rate - portion of the U.S. population that is actively seeking but cannot find work Put together by Bureau of Labor
Statistics (BLS) Unemployment rate in March 2015:
5.5% (8.6 million people) 6.7 million part-time and 738,000
discouraged/not looking for work (underemployed workforce)
Inflation - the rise in price of goods and services in response to economic situations
Calculated by consumer price index - measured trends in the cost of a basket of consumer goods and services Cost of what an average person would
spend on various goods
March 2015: rise of 0.2%
Gov’t Involvement in the Economy
Laissez-faire - “allow to do”; economic attitude of letting the economy take care of itself without gov’t interference
How much gov’t is too much gov’t in the economy? As a mixed economy, we have a least
SOME gov’t involvement…
Economic Policymaking
1.) Monetary policy - gov’t manipulation of the supply of money to influence the direction of the economy
Executed by the Federal Reserve System (“the Fed”) regulates bank lending, interest rates, and
money supply 7 member Board of Governors each with
14 year terms, appointed by President, approved by Senate
2.) Fiscal policy - using the federal budget (taxing, spending, and borrowing) to influence the economy
2 views: more gov’t involvement vs. more consumer involvement
Keynesian Economic Theory
the gov’t must stimulate the economy when it falters by spending money to create programs, jobs, bailouts, etc.
More jobs = more money for consumers = more demand for goods = better economy
Generally advocated by Democrats/liberal ideologies
Supply-Side Economic Theory
Focuses on the supply of goods, rather than the demand
Advocates for lowering taxes to encourage people to invest in businesses and produce more goods
Less restrictions = More work = more goods = better economy
Generally advocated by Republicans/conservative ideologies
The U.S. and Capitalism
Capitalism - economic-political system where the economy is controlled by private businesses rather than the gov’t
U.S. gov’t doesn’t have complete control or influence over the economy because consumers and businesses own the means of production, not the gov’t Can make it difficult for the gov’t to guide
economic policy effectively
Social Welfare Policymaking
Entitlement programs - gov’t benefits that must be given to individuals who qualify for them regardless of need (ex: social security, Medicare)
Means-tested programs - gov’t benefits given to individuals who qualify based on specific needs (ex: food stamps, Medicaid)
Poverty in America
Income is how much money is made during a specific time period; wealth is how much a person’s assets/belongings are worth
Poverty generally defined by annual income thresholds (make a certain amount of money a year or below) --> AKA the “poverty line”
2015 - over 44 million Americans living in poverty
Trends: higher poverty rates for minority groups (African Americans, Hispanics, etc.), single women with children, residents of inner city areas, and some elderly
Wealth and Taxes
Progressive tax - the higher the income, the higher the taxes that are paid (ex: income tax) The wealthy carry more of the tax burden
Proportional (flat) tax - individuals pay the same tax rate, rich or poor (ex: sales tax in theory)
Regressive tax - taxes that place more of a burden on lower income individuals than high income individuals (ex: sales tax in practice)
Relieving the Poverty Burden
Earned Income Tax Credit (EITC) - tax benefits for low-income working individuals
Gov’t gives benefits to these individuals, either through direct payments of money (transfer payments; ex: EBT cards) or “in-kind” benefits (non-money benefits; ex: Food Stamps)
Legislating Social Welfare and Welfare Reform
Social Security Act of 1935 - established the Social Security system for aged/retired persons to alleviate poverty in old age
Part of FDR’s New Deal programs
Means-tested welfare programs are controversial: are they solving poverty or enabling it?
Personal Responsibility and Work Opportunity Reconciliation Act (1996) Each state gets fixed amount of welfare funds Welfare recipients must find work within 2
years or lose all benefits Lifetime limit on welfare: 5 years Welfare now known as Temporary Aid for
Needy Families (TANF)
Social Security
Is currently the U.S.’s most expensive entitlement program (currently costs about $866 billion a year)
Payroll taxes are taken out of working individuals’ paychecks and put in Social Security Trust Fund
These funds are then paid to eligible retired persons on a monthly basis (who have been paying into the system during their working years) Basically, work force funds individuals in
retirement
PROBLEMS:
More people are retiring and drawing on Social Security, but there are not enough in workforce to fund them
Without reform, the system will eventually go bankrupt/need forced funding from Congress
Environmental Policymaking
Concern for environment has grown from conservation to active prevention of environmental harm
Environmental Protection Agency (EPA) - regulatory agency in charge of implementing clean air, water, wilderness and wildlife protection policies
National Environmental Policy Act (NEPA) (1969):
requires gov’t agencies to file environmental impact statements (detailed reports on a policy’s environmental effects) before implementing policies that can harm the environment
Clean Air Act of 1970 - enforced by EPA to improve air quality and reduce the U.S. population’s exposure to air pollutants
Has led to many states implementing emissions standards/rules for vehicles, factories, etc.
Water Pollution Control Act of 1972 - enforced by the EPA to improve cleanliness of lakes, rivers, and other waterways and prevent to water pollution
Wilderness preservation policies largely guarded by the National Park Service
Endangered Species Act of 1973 - list of protected endangered animals enforced by the Fish and Wildlife Service (to be protected by the gov’t at all costs)
Toxic and Nuclear Waste
Superfund - fund created by Congress to clean up hazardous waste sites (funded by taxing chemical products) For when polluters could not be found
to clean up waste sites Enforced by the EPA
Nuclear waste controversial: where to dispose of it?
Global Warming
The gaseous waste of fossil fuels (coal, oil, natural gas) produce carbon dioxide
This builds up in the atmosphere and traps heat against the Earth (“greenhouse effect”)
Solution: reduce emissions and look for cleaner energy sources
Energy Policymaking
Tied closely to environmental policymaking, esp. concerning environmental impacts
COAL: most used, abundant (and dirtiest) fuel source; 21% of U.S. energy use, about 50% electricity source Mines constantly targeted for emissions
levels and health issues for workers
OIL AND NATURAL GAS: 36% of U.S. energy and fuel for most transportation
Controversy over dependence on foreign oil vs. using natural U.S. deposits (often involves offshore drilling/large environmental impacts)
NUCLEAR ENERGY: 20% of U.S. electricity; controversial and dangerous: expensive to produce, hazardous to dispose of
RENEWABLE ENERGY: wind, solar, water, biomass (plant materials); 6% of electricity; grow fast as alternative forms of energy
Healthcare Policymaking
Healthcare is inherently expensive, esp. in U.S. economy (1/5 of GDP)
Largely paid for by the federal gov’t (Medicaid and Medicare programs) and insurance companies
Healthcare benefits are largely accessed through employment insurance (pay a yearly premium, insurance co. pays for part of medical services) Businesses decide qualifications for
benefits (ex: full-time vs. part-time) Health maintenance organization
(HMO) - a collection of healthcare providers who offer a range of services for set fee
MUCH cheaper to access healthcare through employer or gov’t than on your own
Uninsured forced to pay full price for medical coverage (often will go without until emergency situations)
The Gov’t and Healthcare
Medicare - healthcare benefits for the elderly who qualify (entitlement program)
Medicaid - healthcare benefits for the poor who qualify (means-tested program)
Both are the gov’t’s most expensive programs behind Social Security
Healthcare Reform
Many presidents have supported healthcare reform (T. Roosevelt, Truman, Clinton, etc.)
Problems to Solve: How can we give everyone equal
access to affordable healthcare? How can we make sure insurance
companies provide coverage for those who need it?
The Patient Protection and Affordable Care Act (2010)
Landmark healthcare legislation (aka “Obamacare” or “ACA”)
COMPONENTS: Establish affordable gov’t provided
healthcare plans for those who sign up Create a marketplace of competitive
health insurance options between gov’t plan and other insurance plans
Prohibit exclusion of people with pre-existing conditions from health coverage
Make sure insurance companies don’t drop coverage for the sick
Require large businesses to provide healthcare for their employees
Require that every citizen (regardless of need) have health insurance to pay into the system for those who really need it (or pay penalty tax)
Expand eligibility for Medicaid tax credits/gov’t subsidies (funds) for
poor and small businesses
National Security Policymaking
Foreign policy - gov’t decisions/policies concerning the U.S.’s relationship with the rest of the world
Largely controlled by the president, the Department of Defense, other exec. agencies, and Congress
Who Carries Out Foreign Policy?
1.) Military U.S. has often used force to deal with
global threats (to keep peace, to take down regimes, to aid other countries, etc.)
2.) The Economy Economic interests play a huge role in
country relations (esp. commerce); can be used as “bargaining chips”
3.) Diplomacy
The most peaceful method: countries forging relationships and agreements by “talking it out” (includes Secretary of State, ambassadors, etc.)
The World Stage
United Nations (UN) - (est. 1945) - a multinational organization committed to a mission of international peacekeeping Includes the General Assembly (193
countries) and the Security Council (15 members, U.S. a permanent member)
North Atlantic Trade Organization (NATO) - (est. 1949) Members: U.S., Canada, many Western
European countries, Turkey Have agreed to join military forces if any
member is attacked in war
European Union (EU) - transnational gov’t including most European nations Have common currency (euro), trade,
labor, and immigration policies
Who Makes Foreign Policy?
1.) THE PRESIDENT chief of state (rep. of U.S. to world) chief diplomat (negotiates treaties
and executive agreements), commander-in-chief (in charge of
military) In charge of setting the course and
direction of the U.S. at home and abroad
2.) The Department of State
In charge of implementing foreign policy and maintaining embassies
Secretary of State a key foreign policy advisor to President
Secretary and ambassadors largely take on the work of international diplomacy
3.) Department of Defense Housed in the Pentagon Includes Army, Navy, and Air Force Secretary of Defense + Joint Chiefs of
Staff (highest military branch officials) serve as top advisors to President
Pres. +VP + SOS + SOD = National Security Council (NSC)
4.) Intelligence Agencies
Central Intelligence Agency (CIA) - in charge of gathering international information for the purpose of monitoring national security (can also include espionage of enemy nations)
Not allowed to operate within the U.S., only outside of it
National Security Agency (NSA) - agency of the Dept. of Defense in charge of breaking foreign encryptions and monitoring flow of electronic information for security purposes
5.) Congress
Has the sole power to declare war
Senate approves treaties
Appropriates funding for foreign policy actions (military esp.)
Oversight of the actions of the executive branch
U.S. Foreign Policy History
isolationism - long-term foreign policy in which U.S. stayed out of other nations’ conflicts, esp. wars in Europe
Bent during WWI, broken after WWII
The Cold War
A non-combative period of hostility between U.S. and the communist Soviet Union following WWII until 1989.
Containment doctrine - method in which the U.S. was to isolate the Soviet Union and its spread of communism
Arms race - U.S. and Soviets each compete to come up with higher standards of weapons
Spread of communism in South Asia gets U.S. involved militarily (ex: Korean War and Vietnam War)
Détente - gradual move in foreign policy to relax tensions between U.S. and Soviet Union with promises of security for both
Cold War continues: even though foreign relations have eased, U.S. still keeps up military strength for protection (ex: Reagan rearmament)
Upheaval causes fall and break up of the of Soviet Union in 1989
Defense Policies
Strategic Arms Limitation Talks (SALT) - détente era agreement in which U.S. and Soviets agree to limit nuclear weapon production, keeping enough to protect against surprise attacks
Strategic Defense Initiative (SDI) - Reagan-era strategy that would use ground and space-based nuclear lasers to take down missiles shot at U.S. from other countries
The War on Terrorism
Sparked by the events of Sept. 11, 2001, the U.S. goes to war in Afghanistan and Iraq to seek out Al Qaeda terrorists
Also to take out dangerous regimes (Saddam Hussein) and search for weapons of mass destruction (WMDs)
Today’s Defense Policies
The U.S. is the world’s most powerful military power, but force cannot be used for everything
U.S. has also passed sanctions - non-military penalties against a foreign gov’t to try and influence their behavior
Trend: growth of diplomacy as first option, scaling back of military action
U.S. a massive force of world economy through trade and humanitarian aid
Interdependency - mutual economic reliance of nations on one another; if one economy falters, all feel the consequences
The U.S. and International Trade
U.S. movement away from reliance on tariffs - taxes on foreign imports (to protect U.S. businesses)
Balance of trade - ratio between what is earned from exports vs. what is paid on imports U.S. has been in deficit (more import
expenditure than export revenue)
Continued dependence on products like oil from the Organization of Petroleum Exporting Countries (OPEC) strikes an uneasy balance between foreign and economic policies
Baker v. Carr (1962)
Charles Baker sued Secretary of State of TN Joe Carr because TN had not reapportioned/redrawn its districts since 1901, despite TN law. Baker said changes in population to cities made elections unfair under such old districting.
Importance of the Case: SC ruled they had power to rule over
legislative apportionment and could intervene when states violated constitutional principles.
U.S. v. Nixon (1974)
In the course of the Watergate investigation, it was discovered President Nixon recorded all White House conversations. He was ordered to release the tapes, but refused, claiming executive privilege.
Importance of the Case: SC ruled that in certain circumstances, the
president may use executive privilege for national security, military, etc. reasons, but not in criminal investigations (was the court’s call when it was appropriate)
U.S. v. Lopez (1995)
Alfonso Lopez was charged under TX law for possessing a firearm on school premises. He was also charged under a federal law, the Gun-Free School Zones Act.
Importance of the Case: SC ruled that the federal law was
unconstitutional, as Congress did not have the commerce powers to regulate gun possession in school zones.
THE END.
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