Budget

Laissez-faire economy

Economic policy in which governments intrude as little as possible in the economic transactions between citizens and businesses

Command & Control Economy

Economic policy in which government dictates much of a nation's economic activity, including the amount of production and the price of goods

Mixed Economy

Economic policy in which many economic decisions are left to individuals and businesses, with the government regulating economic activity

Gross Domestic Product

The total value of goods and services produced by the economy

Economic Recession

A period of decline in economic activity, typically defined by two consecutive quarters of negative GDP growth

Unemployment Rate

The percentage of people actively looking for work who cannot find jobs

Inflation

The rise in the price of goods and services

Consumer Price Index

The cost of a fixed basket of goods and services over time, used to measure the cost of living

Keynesian Economic Theory

The government should spend money when the economy is weak. Stimulate the economy during times of economic recession by spending money to encourage economic growth. Spend on public works, payments to citizens. Favored by liberals.

Supply Side Economic Theory

When the economy is weak, the government should cut taxes so the wealthy spend more money and the benefits trickle down to others. Stimulate the economy by cutting taxes to encourage businesses to grow and taxpayers to spend more money. Favored by conservatives.

Fiscal Policy

The use of the federal budget, through taxes, borrowing and spending to influence the economy.

Monetary Economic Theory

Use the money supply as a tool to influence economic growth and productivity.

Monetary Policy

A set of economic policy tools designed to regulate the amount of money in the economy. Involves changing interest rates and the supply of money in the economy.

Federal Reserve System

A board of governors, Federal Reserve Banks, and member banks responsible for monetary policy.

Mandatory Spending

The government must spend on these items

Medicare

Health care for the elderly

Medicaid

Healthcare for the poor

Discretionary Spending

Spending on these items is a choice

The Patient Protection & Affordable Care Act

A requirement that employers with 50 or more full time employees provide health care insurance for the employees or pay a penalty for not doing so, for individuals to obtain health care insurance (some exceptions) or pay a penalty for not doing so, expansion of Medicaid, creation of healthcare exchanges, cover adults to the age of 25, prohibition against excluding individuals with pre-existing medical conditions

Budget

A policy document allocating burden (taxes) and benefits (expenditures)

Deficit

An excess of federal expenditures over federal reserves

Expenditures

Government spending. Major areas of federal spending are social services and national defense

Revenues

The financial resources of the government. The four main sources of revenues are: the individual income tax; the Social Security tax; the corporate income tax and excise tax

Incrementalism

A description of the budget process in which the best indicator of this year’s budget is last year’s budget plus a little more

Pork barrel legislation

Gives tangible benefits to constituents in several districts or states in the hope of winning their votes in return

Logrolling

An arrangement in which two or more members of Congress agree in advance to support each other's bills.