AmericanPolitics: Chapter 14

public policy

a course of action pursued by government to address a specific problem

policy agenda

the set of desired policies that political leaders view as their top priorities

fiscal policy

government decisions about how to influence the economy by taxing and spending

monetary policy

government decisions about how to influence the economy using control of the money supply and interest rates

budget making

the processes carried out in congress to determine how government money will be spent and revenue will be raised

United States trade representative

an agency founded in 1962 to negotiate with foreign governments to create trade agreements, resolve disputes, and participate in global trade-policy organizations. treaties negotiated by the ustr must be ratified by the senate

national economic council

a group of economic advisers created in 1993 to work with the president to coordinate economic policy

aid to families with dependent children

the federal welfare program in place from 1935 until 1996, when it was replaced by tanf under president Clinton

federal reserve system

an independent agency that serves as the central bank of the United States to bring stability to the nation's banking system

treasury department

a cabinet-level agency that is responsible for managing the federal government's revenue. it prints currency, collects taxes, and sells government bonds

full employment

the theoretical point at which all citizens who want to be employed have a job

economic depression

a deep, widespread downturn in the economy, like the Great Depression of the 1930s

council of economic advisers

a group of economic advisers, created by the employment act of 1946, that provides objective data on the state of the economy and makes economic policy recommendations to the president

inflation

the increase in the price of consumer goods over time

deflation

a decrease in the general prices of goods and services

gross domestic product

the value of a country's economic output taken as a whole

balanced budget

a spending plan in which the government's expenditures are equal to its revenue

budget deficit

the amount by which a government's spending in a given fiscal year exceeds its revenue

Keynesian economics

the theory that governments should use economic policy, like taxing and spending, to maintain stability in the economy

supply-side economics

the theory that lower tax rates will stimulate the economy by encouraging people to save, invest, and produce more goods and services

business cycle

the normal pattern of expansion and contraction of the economy

mandatory spending

expenditures that are required by law, such as the funding for social security

discretionary spending

expenditures that can be cut from the budget without changing the underlying law, which is everything other than defense, entitlements, and interest on the debt

regressive

describes taxes that take a larger share of poor people's income than wealthy people's income, such as sales taxes and payroll taxes

progressive

describes taxes that require upper-income people to pay a higher tax rate than lower-income people, such as income taxes

monetarist theory

the idea that the amount of money in circulation is the primary influence on economic activity and inflation

reserve requirement

the minimum amount of money that a bank is required to have on hand to back up its assets

discount rate

the interest rate that a bank must pay on a short-term Lon fro the federal reserve bank

federal funds rate

the interest rate that a bank must pay on an overnight loan from another bank

open market operations

the process by which the federal reserve system buys and sells securities to influence the money supply

social policy

an area of public policy related to maintaining or enhancing the well being of individuals

welfare

financial or other assistance provided to individuals by the government, usually based on need

new deal

the set of policies proposed by president for and enacted by congress between 1933 and 1935 to promote economic recovery and social welfare during the Great Depression

great society

the wide-ranging social agenda promoted by president Lyndon b Johnson in the mid-1960s that aimed to improve Americans' quality of life through governmental social programs

ownership society

the term used to describe the social-policy vision of the president geared w bush, in which citizens take responsibility for their own social welfare and the free market plays a greater role in social policy

privatization

the process of transferring the management of a government program from the public sector to the private sector

medicare

the federal health care plan created in 1965 that provides coverage for retired Americans for hospital care, medical care, and prescription drugs

medicaid

an entitlement program funded by the federal and state governments that provides health care coverage for low-income Americans who would otherwise be unable to afford health care

entitlement

any federal government program that provides benefits to Americans who meet requirements specified by law

income support

government programs that provide support to low-income Americans, such as welfare, nutritional support benefits, unemployment compensation, and the eitc

temporary assistance for needy families

the welfare program that replaced afdc in 1996, eliminating the entitlement status of welfare, shifting implementation of the policy to the states, and introducing several new restrictions on receiving aid. these changes led to a significant decrease int he number of welfare recipients

baby-boom generation

Americans born between 1946 and 1964, who are retiring in large numbers over the next 20 years