American Government and Politics Today

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American Government and Politics Today

• Chapter 14
• Domestic and Economic Policy

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The Policy-Making Process

• Agenda building
• Policy formulation
• Policy adoption
• Policy implementation
• Policy evaluation

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Health Care

• The rising cost of health care
• Advanced technology
• The governments role in financing health care
• Medicare
• Medicaid
• Why has Medicaid spending exploded?
• Medicaid and the states
• The uninsured

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The percentage of national income spent on health
care has risen steadily since 1965
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Per capita spending on health care is greater in
the U.S. than almost anywhere else in the world
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Life Expectancy in the U.S.
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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

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Poverty and Welfare (continued)

• Basic welfare
• Temporary Assistance to Needy Families (TANF)
• Welfare controversies
• Other forms of government assistance
• Supplemental Security Income (SSI)
• Earned-Income Tax Credit (EITC)
• Homelessness as an ongoing problem

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Immigration

• 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

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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 studys estimate
  
  1 trillion per year

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Violent crime rates have declined since 1994
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Homicide rates have also declined
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Rates of theft have declined significantly since
the 1970s
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Crime in the 21st Century (continued)

• The prison population bomb
• The U.S. incarceration rate
• International comparisons
• Prison construction
• Effects of incarceration
• Federal drug policy
• Confronting terrorism

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The United States has the highest incarceration
rate among major world nations, as measured by
the number of prisoners per 100,000 residents
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Incarceration Rates by Population Group
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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

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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?

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Net Public Debt of the Federal Government
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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

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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?

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Currently Americans pay taxes that total
somewhat less than 30 percent of the GDP
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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
  System?
• Raise taxes
• Other options

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The number of workers per retiree has fallen
precipitously
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World Trade

• Economists of all stripes support international
  trade, but public opinion often differs
• Imports and exports
• Dramatic growth in global trade
• Free trade areas and common markets
• NAFTA, the European Union
• The World Trade Organization

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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?

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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.

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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?