Public Policy Test 10

bear market

stocks and bonds go down in value, economy goes down (bust time)

bull market

stocks and bonds go up in value, economy growing (boom time)

deflation

prices and wages come down, lose jobs
leads to recession

depression

severe and long lasting decline in the economy that occurs as investment sags, production falls off, and unemployment increases

deregulation

a policy promoting cutbacks in the amount of federal regulation in specific areas of economic activity

distributive policy

Everyone that puts in gets back
Public policy that provide benefits to individuals, organizations, and communities
fed regulations that offer benefits to all groups in society and are funded by citizens equally
social security, medicare

economic regulation

controls on behavior of business in the marketplace

environmental regulation

affect everyone

real economic growth

how much money is changing (with inflation)

incrementalism

procedural in nature, gradual
Small changes in policy over long periods of time; usually in reference to budget-making--that the best indicator of this year's budget is last year's budget plus a small increase

inflation

increase in prices, wages, etc.
value of money goes down
Fed targets 2% inflation

laissez faire economics

economic policy that endorses very limited role in government in economy- opposes extensive gov control

Keynesian economics

the economic approach made by John Maynard Keynes
spending money by the government would be more helpful than a free market in growing economy

market/demand economy

market is based on the demand of a product (based on what people want)
prices by free market price
gov has some involvement

public assistance

welfare-type programs
aide to the poor/needy in cash or vouchers

mixed economy

combination of private and public enterprises (capitalism and socialism)
a little planned/market

monetarism

government should control the money supply to encourage economic growth and restrain inflation
- gov is in control
- have this before monetary policy

planned/command economy

government determines what, how much, price of goods, and which of them are sold, Like socialism
Gov runs the economy

policy agenda

set of issues to be discussed or given attention

Privitization

public policy

a specific/intentional course of action taken by government to achieve a public goal or deal with some problem or matter of concern
Punishment for not complying with them, course of action, important how carried out.

quantative easing

type of monetary policy
throwing money into economy by buying random things to get money going
speed up economy

Reaganomics

Policies by Ronald Reagan that combined a monetarist fiscal policy, supply-side tax cuts, and domestic budget cutting
reduce size of federal government to stimulate economic growth

recession

decline in economy, occurs when investment sags, production falls of, and unemployment occurs

redistributive policy

everyone pays in but not everyone gets back
policy that transfers resources from one group to assist another group
most social welfare programs, student loans

social regulation

attempts to correct the social side effects of economic activities

social insurance

programs in which eligibility is based on prior contributions to gov, like payroll taxes

stagflation

price increase, wages don't increase
slow economic growth and high unemployment while prices rise
falling output and rising prices

supply-side economics

tax cuts increase the supply of money in the economy, stimulating economic growth
Republican view of thinking?

trickle-down theory

Wealthy's income taxes decrease to promote business and the whole economy
gov attempts to indirectly aid the needy by promoting growth at the business level hoping it will influence prosperity at all levels
all levels.

unemployment insurance

employers pay a payroll tax to finance social insurance program that benefits full-time employees of companies (if 4+ people become unemployed and is not their fault)
state gov administer a program that protects workers incomes in case of unemployment
eligible workers can receive benefits for up to 26 weeks
Administration by state govs, but funded in part by federal unemployment taxes.

welfare reform

changed federal governments social welfare policy by shifting responsibility to states and cutting benefits
Ended guarantees of federal aid to children, turned over such programs to states, food stamp spending cut, added five year limit on payments to any family

W-shaped

describing a graph, usually a deficit

entitlements

means-tested entitlements

What is public policy?

specific course of action or inaction taken by government to achieve a public goal or deal with some problem or matter of concern

How is public policy made?

implemented by bureaucracy

Elite theory

bureaucratic

special interest theory

pluralist theory

theory of competing interests
political resources scattered

How is public policy conveyed?

laws passed by congress, orders from the president, rules and regulations of the bureaucracy, opinions by the courts

What does public policy tell?

It tells who is about to get what, when, and how, from the governor

tools available to enact public policies

what is the process of public policy?

Agenda Setting
Formulation
Adoption
Implementation
Evaluation
AFAIE

agenda setting

process of forming the list of issues to be addressed by government
government recognition that a problem is worthy for consideration or for government implementation

systematic agenda

public issues

governmental/institutional agenda

problem obliged to be solved
narrower than system

formulation

alternative approaches to problems placed on the governments agenda
crafting of proposed courses of action to resolve public problems

formulation: technical aspect

correctly stating what one wants to authorize/accomplish

routine formulation

altering existing policy/proposals that government has already addressed

analogous formulation

handles new problems by drawing from old problems

creative formulation

attempts to develop new proposals that present departure from existing practices to better solve a problem

adoption

formal selection of public policies
approval of a policy proposal by someone with authority (legislature or chief exec.)
policy gains legal force
requires building majority coalitions to secure enactment of legislation
Bill may be watered down or fail to win the majority (die)

implementation

funding, administration, application of public policies to their targets
process of carrying out public policy (mostly done by administrative agencies)

implementation by private compliance

a way policy is enforced, voluntary compliance

Administrative discretion techniques of implementation

Authoritative
Incentive
Capacity
Hortatory
Budgetary

evaluation

process of determining whether course of action is achieving its intended goals, being effective, being fairly and efficiently administered

fiscal policy

created by elected officials so extremely controversial
done by taxing and spending
determined by elected officials

fiscal policy: taxing

main component of fiscal policy

monetary policy

1. Price Stability
- not too much inflation or deflation
2. Sustainable Economic Growth
nation's money supply and interest rates are controlled
took money out of the hands of congress and the president and gave it to an organization that's supposed to be non-partisan
FED is supposed to do it since they are outside the realm of elected officials

who makes monetary policy?

non elected organization
federal reserve system

organization of Federal Reserve system

12 regional banks and leadership
Each regional bank has their own board
can respond to differences in economy in various parts of country

Makeup of Board of Governors

Governs the 12 reserve systems
6 members and chair
Presidential appointment and Senatorial approval
Serve 14 year terms
makes most economic decisions regarding interest rates and the supply of money

Chairman of Board of Governors
How chosen and for how long?

Chosen by President
4 year terms
chairman of FED, oversees entire system
speaks for the board
2nd most influential person in the country

Make-up of Federal Open Market Committee (FOMC)

12 members total
7 members of board of gov, NY President Federal Reserve
4 others from regional banks (on a rotating basis) (don't have right to vote)

FOMC jobs

meets 8 times a year
come up with our money supply and monetary policy, reviews economic and financial conditions, asses the risk to long-term goals of price stability and sustainable economic growth

How the FED influences the economy?

buying and selling government bonds, raising and lowering interest rates, raising and lowering reserve requirements

How does the government influence economy?

innovation, subsides, anti- dumping

What does the Fed review, determine and asses?

What is monetary policy?

1. Price Stability- not too much inflation or deflation2. Sustainable Economic Growthnation's money supply and interest rates are controlledtook money out of the hands of congress and the president and gave it to an organization that's supposed to be non-partisanFED is supposed to do it since they are outside the realm of elected officials

What does monetary policy target?

stable inflation

Economic policy

market versus planned policy

supply side v Keynesian v Laissez-faire v socialism

Who is social security for?

initially for elderly, disabled added later
now for retirement and disability
pay for hospitals, doctors, prescriptions, dental

How is social security paid for?

payroll taxes

How is social security the "third rail"?

Don't mess with social security
Importance: politicians don't want to lose votes and they would lose votes from elders (who rely on social security)

Who is medicare for?

Those 65 years old or older and certain medically disabled persons regardless of age

How is medicare paid for?

payroll taxes, general revenues

How to avoid regulating policy?

Off-shoring

sending jobs overseas, take advantage of lower pay and costs

tax havens

corporation moves overseas, different rules on policies

tax inversion/corporate inversion

moving corporation to pay taxes in lower areas
bring in foreign investors who get different tax structure

foreign protection policy

strong dollar: attracts money coming in, and foreign imports. impacts jobs
weak dollar: makes our exports cheaper

How is the value of a dollar determined?

by someone buying and selling things
NOT the government

anti - dumping

usually relates to Japan
a protectionist tariff that gov imposes on foreign imports that prices lower than fair market value
ex) cannot cost LESS to produce a car than being SOLD

Protection of Intellectual Property

An expressed idea or concept that has commercial value
a creative idea or invention that can be patented, copyrighted, trademarked, etc.(manuscript or design)
protecting innovation

Protectionist of trade property

strategic/manage trade policies

President v Congress in conducting foreign policy

foggy bottom

ambassadors

representative of US in foreign countries
appointed by President

embassies

American soil in other territories/countries
diplomatic immunity

consulates

branches of embassies in other countries

foreign service

professional diplomat
does the real work

passport

proof of citizenship of US
belongs to US, so they can ask for it back

visa

permission to enter the country
only needed in some countries

DOD

pentagon
department of defense

civilian control

military carries out policy
secretary of army and defense