Midterm 1 Flashcards
What is Public Policy?
Measures that collectively affect people and institutions.
Do people trust the Executive Branch?
Most people support it when their candidate is in office but when the opposition is in office they don’t support it. This gap is getting wider
Implementation
The process of putting a decision into effect and the costs associated
Biden policies
Clean energy
Caregiving kids and elders
Infrastructure investment
Progressive tax hike
Trump Policies
10% Tariffs
Corporate Tax Cuts
Merit goods
Goods that would be under consumed without government intervention (Think Healthcare, Education)
Vitality vs Security
Vitality - Market-based system to reduce wasteful costs
Security - Assured care for all
Affordable Care Act (ACA)
More access to healthcare at a reasonable cost. Expanded public options, added tax incentives for healthcare.
Nudging
Using subtle laws to push people into making good decisions. (Seatbelt laws, tax on alchohol or sugar)
Are people satisfied with the state of the nation?
Not so much and dissatisfaction is growing. Democrats are much more satisfied with the state of the nation than republicans but numbers are still low everywhere
Nanny State
Government provides a high degree of security that reduces inequality and inequity
Daddy State
“quid pro quos” to improve conduct and civil order as part of the social contract
Minimum “Do it yourself” State
Use market forces and then let people solve problems on their own.
Partisan divide on how much government should provide
Democrats want more government intervention in health care, environmental issues, eliminating poverty, and social issues. Republicans want slightly more intervention on terrorism, immigration and protecting U.S interests
Supply and Demand
Supply goes up demand goes down. Higher price less demand, but higher supply. find equilibrium
What effect do Taxes have on the economy?
increases burdens on consumer and producer
Administrative Burden
The costs of participating in public programs and public actions and more, from the consumer or client’s perspective. (learning costs, compliance costs , psychological costs, red tape)
Good government
To make citizen experiences more transparent, make benefits and rights more accessible, to treat citizens respectfully, and assure program fidelity and integrity
Sludge
extra costs and annoyances meant to discourage someone from working in their own interests
Impacts of administrative burdens on voting
Lower income families are less likely to vote because of time constraints or burdens on them.
Goals of spending and taxation
Protect the nation, maintain and enhance natural resources and the environment, Make markets work together, reduce poverty, provide public health, etc.
What does our budget do?
16% - Defense/International Security
23% - Social Security
25% - Medicare, Medicaid, Subsidies
8% - Safety net programs
8% - Interest on Debt
8% - Benefits for Federal Retirees
2% - Transportation Infrastructure
2% - Education
1% - Foreign Aid
4% - Other
Where do we get federal funding
50% - Federal income tax
36% - Payroll Tax
8% - Excise, Estate, other
7% - Corporate income tax
Revenues over time
Corporate income tax has gone down. Payroll tax has gone up, Excise, and Estate taxes have gone down. Benefits wealthy
Mandatory vs discretionary funding
69% Mandatory - Entitlements Interest payments, Medicare/Medicaid, Market Subsidies
31% Discretionary - Military, education, Transportation, Anything else that needs funding.
Drivers of Budgets
Mandatory increasing, Discretionary decreasing, Net interest increasing especially after covid spending
Budget deficits
Deficit is outpacing revenues and increasing. Have to be paid for, raise interest rates, but do buy important things.
Who holds our national debt?
Japan, China, UK and the three biggest
What is the Congressional Budget Office (CBO)?
Nonpartisan office that informs congress of potential economic costs of certain policies. Tries to stop really bad ideas. acts as a sort of referee
State and local budgets
Focus on sharing costs with the federal government. Much of federal spending goes to states who distribute it. States have limited control over budgets
Role of States in Policy
Administer and deliver benefits, Big role in education, reduce imprisonment and recidivism.
Breakdown of state vs local spending
Most public welfare spending is state. Most education is local, higher education is mostly state, the rest is a combination of both
Wisconsin budget
Balanced Budget requirement. still structural deficit. Lowest tax burden in years. Many “rainy day” funds. revenue falling as a share of income as spending needs go up. Has forgone almost 2.8 billion by not taking the Medicaid expansion from the ACA
Wisconsin revenues
52% - Income
34% - Sales
6% - Corporate Income
4% - Excise
4% - Other
Regressive tax system in Wisconsin
lowest income brackets pay the highest share of taxes. lowest 80% each pay about 10% of income top one percent pay 7.7% of income
Minimum wage
Keeps going down adjusting for the cost of living. Way lower than average wage around $25 an hour. Raising could cause unemployment. Higher minimum wages would mean higher wages for millions of Americans.
Worker wages in minimum wage states
Raising minimum wage would help the bottom 25% of workers drastically. Less change to top 75%. In Seattle raising minimum wage les to no significant job loss but did have reduced hours for some workers.
Living wage
Line of liveable is always changing. Depends on place and amount of dependants
Labor laws and enforcement
Tippable wages, Mandatory overtime, Back pay? Is wage theft happening? Does the government have funding and staff to enforce laws
Non-Compete Agreements (NCA)
Can’t move to a rival firm and compete with a business. NCA leads to lower wages because of less labor competition.
Official Poverty Rate
3 times the food budget for a family. Hasn’t been revised since 60s
Supplemental Poverty Rate
Sum of income plus tax credits and any government benefits families can use minus taxes and expenses for critical goods. A better measure of poverty but not perfect.
Relative pay rates
9 out of 10 biggest occupations pay far less than the US average wage in 2010
Workfare
Work requirement to keep government benefits. No benefits if you aren’t working or looking for a job
Geographic distribution of poverty
Most poverty is in the south and southwest and around appalachia in Virginia
Persistent poverty
A county is in persistent poverty if there is over 20% poverty for 10 years
Cares Act
Policy meant to alleviate burdens from Covid. $4 trillion package. $884 Billion to families and workers. Rest to businesses, healthcare and tax breaks.
Encouraging work
Can’t just give out money. People won’t work.
Work support
Carrots over sticks. Increase EITC, subsidize childcare, increase minimum wage
What Reduces Child Poverty?
Social safety net, social security, SNAP, EITC
SNAP
“negative income tax” to pay for food. 76% of SNAP households have children, the elderly, or a disabled person. May not provide enough food. 80% of SNAP benefits are used in the first half of the month
Should we restrict SNAP?
Only healthy foods?
Forced work?
Drug testing?
Earned Income Tax Credit (EITC)
Refundable income tax credit for low to moderate income individuals and couples. Depends on income and amount of children
Impacts of EITC
Everyone loves it. Subsidizes income. employers don’t have to pay as much. Linked to better infant health, closes poverty gap.
Child Tax Credit (CTC later ACTC)
Tax break for children. Does leave out the poorest Americans because it isn’t available to those who don’t owe income taxes because their earnings aren’t high enough.
Once a year vs year round benefits
EITC and CTC/ACTC only claimable once a year. Makes it hard to divide it up and use it year round.
Child Allowance
Fixes CTC by making child benefits small payments year round. Full credit in the form of monthly payments. Not implemented by USA
