American Government and Politics Today American Government

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					 American Government
  and Politics Today

  Chapter 14
 Domestic and
Economic Policy
   The Policy-Making Process

– Agenda building
– Policy formulation
– Policy adoption
– Policy implementation
– Policy evaluation
Health Care

– The rising cost of health care
    Advanced technology
    The government’s role in
     financing health care
– Medicare
– Medicaid
    Why has Medicaid spending
    Medicaid and the states
– The uninsured
The percentage of national income spent on
 health care has risen steadily since 1965
Per capita spending on health care
 is greater in the U.S. than almost
    anywhere else in the world
Life Expectancy in the U.S.
        Poverty and Welfare

– Income transfers: transfers of income from
  some individuals in the economy to other
  individuals (through government action)
– The low-income population
   Thresholds and measurement techniques
– The antipoverty budget
Poverty and Welfare (continued)

– Basic welfare
   Temporary Assistance to Needy Families
– Welfare controversies
– Other forms of government assistance
   Supplemental Security Income (SSI)
   Earned-Income Tax Credit (EITC)
– Homelessness as an ongoing problem
– The continued influx of immigrants
   More than a million people a year immigrate
    legally to this country
   Increased importance of minority groups
   Advantages of high rates of immigration
– Attempts at immigration reform
   Protests of May 2006
     Crime in the 21st Century
– Crime in American history
   Violent crime, homicide, and theft are
    currently on the decline, though they will
    always be serious concerns
– Crimes committed by juveniles
– The cost of crime to U.S. society
   One study’s estimate:
    $1 trillion per year
Violent crime rates have declined since
Homicide rates have also declined
Rates of theft have declined
significantly since the 1970s
     Crime in the 21st Century
– The prison population bomb
   The U.S. incarceration rate
   International comparisons
   Prison construction
   Effects of incarceration
– Federal drug policy
– Confronting terrorism
The United States
has the highest
incarceration rate
among major world
nations, as measured
by the number of
prisoners per 100,000
Incarceration Rates
by Population Group
        Environmental Policy
– Cleaning up the air and water
   The National Environmental Policy Act
   The Clean Air Act of 1990
   The Clean Water Act of 1972
– Global warming
   The Kyoto Protocol
   The global warming debate
          The Politics
  of Economic Decision Making
– Fiscal policy
   Keynesian economics supports government
    taxing and spending to stabilize the economy
   Government spending and borrowing
   Discretionary fiscal policy
– Deficit spending and public debt
   The public debt in perspective
   Are we always in debt?
Net Public Debt
 of the Federal
    The Politics of Economic
   Decision Making (continued)
– Monetary policy
   Organization of the Federal Reserve System
     – The Federal Open Market Committee
   Loose and tight monetary policy
   Time lags for monetary policy
     – Shorter for monetary policy
       than for fiscal policy
          The Politics of Taxes
– Federal income tax rates
   Not all income is taxed at the same rate
   The highest rate is imposed on the “last”
    dollar of income
– Loopholes and lowered taxes
   Progressive and
    regressive taxation
   Who pays?
Currently Americans pay taxes
   that total somewhat less
 than 30 percent of the GDP
   The Social Security Problem
– Social Security is not a pension fund
   Rather, it is a pay-as-you-go transfer system
– Workers per retiree
– What will it take to salvage the Social Security
   Raise taxes
   Other options
 The number of
  workers per
retiree has fallen
               World Trade
– Economists of all stripes support
  international trade, but public opinion often
– Imports and exports
   Dramatic growth in global trade
– Free trade areas and common markets
   NAFTA, the European Union
– The World Trade Organization
    Questions for Critical Thinking

 Presuming that national health insurance is
  off the table in the United States, what else
  could be done to protect the uninsured
  population from catastrophic medical costs?
 Prison populations continue to explode.
  What can be done?
    Questions for Critical Thinking

 Why are environmental problems often
  difficult to legislate away? What
  improvements have been made in air and
  water quality in recent years? What
  problems still need solutions?
 Is progressive taxation fair? Support your
  argument that this form of taxation is either
  fair or unfair.
    Questions for Critical Thinking

 Which of the proposals to “fix” Social
  Security have the most merit? Which do you
  think would cause the most problems?
 Why are the public and the economics
  profession on such different wavelengths
  when it comes to world trade?