Chapter 14: Public Policy and Economics Flashcards
economic policy
decisions a government makes that affect the production, distribution, and consumption of goods: the provision of goods: the flow of income: and the accumulation of wealth.
laissez-faire
french for “leave things alone” and the view in economics that government should not interfere in the workings of the economy.
socialism
the view in economics that economics decisions making should be completely under the control of political authority.
recession
a minor and relatively short period of economic decline
depression
a period of serious and sustained economic decline
protectionism
opposite of free trade, belief that government should protect American business and industry by restricting the flow of foreign goods into the United States
free trade
belief that America’s economic interests are best served by allowing foreign producers to sell their goods without restriction in the United States
outsourcing
establishment, by American corporations, of factories and offices in foreign countries to take advantage of cheap labor workers
fiscal year
governmental decisions about taxing and spending that affect the economic life of a nation
monetary policy
governmental decisions about how much money should circulate in the economy and what the cost of borrowing money, the interest rate, should be
Office of Management and Budget (OMB)
an agency in the Executive Office of the President that provides the president with budgetary information and advice and is responsible for compiling the president;s annual budget proposal to Congress.
deficit
an excess of government expenditures over revenues
debt
the total amount of national government owes to lenders, such as banks, individual and foreign investors, insurance companies, and the variety of financial institutions that purchase government securities.
surplus
an excess of government revenues over government expenditures
net interest
charges that the government must pay to the public for the use of money borrowed to cover budget deficits and added to the interest paid to the government trust funds to create total interest costs
incrementalism
a model of decision making that holds that new polices differ only marginally from existing policies
mandatory programs
governmental programs, such as Social Security expenditures, in which spending automatically increases from one year to the next without specific annual appropriations action by Congress
social entitlements
programs, such as Social Security and Medicaid, whereby eligible individuals receive benefits according to law
fiscal year
the budget and accounting purposes in the national government, the twelve-month period beginning on October 1 and ending on September 30 of the following calendar year
authorization
congressional enactment that creates of continues a policy program and the agency administering it
appropriation
congressional enactment that funds an authorized program with a specific sum of money
line-item veto
most state governors have the power, through which a chief executive, reacting to a bill passed by the legislature, may accept some items in the bill while also rejecting other items in the same bill, The president doesn’t not have this power.
balanced budget amenment
a proposal for a constitutional amendment that would require the federal government to operate with a budget in which revenues equaled or exceeded expenditures
continuing resolution
legislative action taken by congress to allow spending to proceed at the previous year’s level when congress has not met the deadline for reaching agreement on appropriations for the next fiscal year
congressional budget and impoundment control act of 1974
legislation that significantly changed congressional budget procedures by creating budget committees, establishing timetable, changing the fiscal year, placing limits on presidential impoundments, and establishing the congressional budget office
Congressional Budget Office (CBO)
a congressional staff unit that provides Congress with budgetary expertise, independent of the president’s budget staff, to help Congress clarify budgetary choices.
sequenstration
the process through which the president makes budget cuts in government programs to meet the mandates in law requiring ceilings on specific categories of spending
Budget Enforcement Act of 1990
legislation that fundamentally changed budget deficit reduction efforts from the focus on deficit targets contained in Gramm-Rudman-Hollings to a focus on ceilings or caps on specific categories of spending
Statutory Pay-As-You-Go Act
law passed in 2010 that requires budget increases to be offset by either reductions elsewhere or increased revenues.
