| Term | Definition |
|---|
| 3 purposes of policy making | solving social problem (crime rates, teen drinking), countering threats (terrorism, war), pursuing an objective (building highway, curing AIDS) |
| usual method of policy making | incrementalism - step by step, slow or inaction |
| issue-attention cylcle | act quick before public loses interest (gas prices) |
| steps of policy making | defining role of govt., agenda setting (identify social and econ problem, redefine into political issue and rank in order of importance), policy formulation and adoption (leg, exec order, rules reg agencies), implementation, evaluation |
| policy making centers | because pluralist democracy - local, state, national; because seperation powers - judiciary, exec, and general bureacracy |
| policy fragmentation | multiple access points cause legislation to deal with only parts policy problem (war on drugs -- 75 committees with jurisdiction to deal with it!) |
| mixed economy | capitalist free-market system in which both govt and private industry play role |
| keynesian economists | govt. can smooth our business cylcles by influencing amount of income individuals and businesses spend on goods and services - through fiscal and monetary policy |
| laissez faire economists | govt shold never become involved in econ issues - free market governed by laws nature |
| fiscal policy | rasing lowering taxes which results in more or less consumer spending or enacting of governement spending programs |
| Keynesian - during downturn | gov should spend money on projects to inject money into economy; less worries about deficit spending |
| Keynesian - when economy is good | surplus taxes (money left over tax revenues) should be saved to pay for govt spending takes place during downtime |
| deficit spending | funds raised by borrowing rather than taxation |
| supply side economics | beleive inflation caused by too many dollars chasing too few goods; of supply of goods raised, cost of goods decline; so cut taxes and spending on domestic programs to stimulate greater production |
| Reagonomics | supply side/trickle down - inflation was brought under control bu huge budget deficit, in part caused by military buildup, raised national debt. |
| monetary policy | process by which govt controls supply of money in circulation and supply of credit though action of FRB |
| FED raises reserve (money banks required to keep on hand) | shrinks money available for borrowing, raises interest rates |
| FED lowers reserve | expands money available for borrowing, lowers interest rates |
| discount rate | interest banks pay to Fed Reserve banks for borrowing money |
| FED lowers discount rate | lower intest rates for consumer loans |
| FED raises discount rate | raise interest rates for consumer loans (higher rate, less ocnsumers purchase0 |
| open market operations | FED buying and selling US government bonds |
| FEd sells bonds | people withdraw from banks to take advantage higher bond rates, banks less to loan so interest rates go up, which slows consumer spending |
| FED buys bonds | money flows back to banks, increases money available for loans, interest rates lower, more consumer spending, economic growth |
| Milton Friedman; monetarists | money supply should be increased at constant rate to accomodate econ growth; dont think manipulating tax rates and interest have much of an impact of economic conditions |
| Budget Process | OMB initiates, writes presidents budget, submits ot House ways and means Committee (deals with taxing issues), Authorization committees in both houses, and Appropriations committees in both houses |
| mandatory spending | required by law and includes entitlement programs like SS, veternans pension, medicare |
| Discretionary spending | not required by law - defense, education, highways etc - usually targe to try to balance budget |
| balance of trade | ratio of imports to exports |
| trade deficit | imports exceed exports; cause wealth to flow form nation, response is to place high tarrifs on imported goods, nation facing restrcitions then imposes impose high import taxes or unfair regulations on products to keep out foreign goods |
| GATT | evolved into WTO- works to lower tarrifs and quotas and reduce unfair trade proctices |
| Welfare Reform Act 1996 | social welfare programs funded by state and federal govt with fed providing most in form of block grant; state administers programs and incentives for finding work and job training |
| intent of WRA 1996 | abolish AFDC, replace with TANF, require adult find job 2 years, place lifetime limit of 5 years, prohibit aliens from recieving assistance |
| political debate over public assistance: 2 focuses | who pays how much and what is fair standard to be used for recipient |
Combine with other sets
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