Unit 8 - Economic Policy (16.1, 16.3, 16.7) Flashcards
cost
total spent for goods or services including money and time and labor
benefit
any satisfaction that people believe that they will enjoy if the policy is adopted
client politics
identifiable, small group will benefit but a large part of society will pay the costs
entrepreneurial politics
political activity with distributed benefits to large numbers or society as a whole and concentrated costs imposed on a small identifiable group pays
majoritarian politics
Make appeals to large blocks of voters and their representatives in hopes of finding a majority
interest group politics
A proposed policy will confer benifits on come relativly small, identifiable group and impose cost on another small, equally identfifiable group
policy entrepreneur
politicians in and out of gov who find ways of pulling together a legislative majority on behalf of interests that are not well represented in the gov
public policy
A choice that government makes in response to a political issue
perception
The process by which individuals perceive what they want to in media messages
budgeting
step 3 in economic policy, deciding amount needed to carry out policy
formulation
step 2 in economic policy, crafting proposed course of action
agenda
step 1 in economic policy, deciding what issues to discuss
adoption
step 4 in economic policy, approval of a policy proposal
implementation
step 5 in economic policy, carrying the policy out
evaluation
step 6 in economic policy, did the policy achieve its goals
President
Secretary of Treasury
OMB (Office of management and budget)
CBO (Congressional Budget Office)
CEA (council of economic advisors)
congress
chairman of the fed
the fed
TARP (Troubled Asset relief program)
political activity with distributed benefits to large numbers or society as a whole and concentrated costs imposed on a small identifiable group pays
American Recovery and Reinvestment Act
designed to stimulate the U.S. economy by saving jobs jeopardized by the Great Recession of 2008–09 and creating new jobs
Monetary Responses of 2008
Gramm-Rodman-Hollings Act
legislation mandating maximum allowable deficit levels each year until 1991, when the budget was to be balanced
Congressional Budget & Impoundment Act of 1974
governs the role of the Congress in the United States budget process, est. congressional budget office
Dodd-Frank Act
intended to curb the extremely risky financial industry activities that led to the financial crisis of 2007–2008, to protect consumers and taxpayers from egregious practices like predatory lending
GDP (Gross Domestic Product)
the dollar amount of all final goods and services produced within a country’s national borders in a year
GNP (gross national product)
he dollar value of all final goods, services, and structures produced in one year with labor and property supplied by a country’s residents
CPI (Consumer Price Index)
a measure of the average change overtime in the prices paid by urban consumers for a market basket of consumer goods and services
inflation
rise in the general price level (and decrease in dollar value) owing to an increase in the volume of money and credit in relation to available goods
recession
A slowdown in economic activity, officially defined as a decline that persists for two quarters (six months)
fiscal policy
decisions the government makes about government spending and taxation
monetary policy
decisions the government makes about how much money should be in the economy
Keynesian policy
economic theory stating that government spending should increase during business slumps and be curbed during booms, developed by economist John Maynard Keynes during the 1930s as a response to the Great Depression
supply side
an economic theory advocated by President Reagan holding that too much income goes to taxes so too little money is available for purchasing, and the solution is to cut taxes and return purchasing power to consumers
monetarism
A theory that government should control the money supply to encourage economic growth and restrain inflation (conservatives like)
why the budget is the foundation for economic policy:
Stabilization of the economy is one of the goals that governments attempt to achieve through manipulation of fiscal and monetary policies
House Ways and Means Committee
has the responsibility for raising the revenue required to finance the Federal Government
Senate Finance Committee
The senate committee that, along with the House Ways and Means Committee, writes the tax codes, subject to the approval of congress as a whole.
Appropriations Committees
responsible for appropriating funding for most of the functions of the federal government
GAO (Government Accountability Office)
Often called the “congressional watchdog,” GAO investigates federal spending and performance
budget
A policy document allocating burdens (taxes) and benefits (expenditures)
deficit
An excess of federal expenditures over federal revenues
incrementalism
The belief that the best predictor of this years budget is last years budget plus a little bit more
budget resolution
A resolution binding Congress to a total expenditure level, supposedly the bottom line of all federal spending for all programs
reconciliation
A congressional process through which program authorizations are revised to achieve required savings. It usually also includes tax or other revenue adjustments
authorization bill
An act of Congress that establishes, continues, or changes a discretionary government program or an entitlement. It specifies program goals and maximum expenditures for discretionary programs
continuing resolution
When Congress cannot reach agreement and pass appropriations bills, these resolutions allow agencies to spend at the level of the previous year
debt limit/ceiling
the limit on how high the debt can go, Congress can change the limit
steps of public policy process (6)
agenda, formulation, budgeting, adoption, implementation, and evaluation
