AP Gov’t UNIT IV

“Mile-a-Minute Mini Lecture”

PUBLIC POLICY

Public Sector v. Private Sector:

The Share of GDP* Taken by

Taxes,** Selected Countries

46.6

45.4

43.6

43.5

42.4

40.5

36.5

35.9

35.8

32

29.4

39.4

38.5

23.1

47

49.3

49.3Sweden

Denmark

Finland

Norway

Belgium

France

Austria

Italy

Greece

CanadaNew

ZealandSpain

Switzerland

JapanUnitedStates

Australia

Turkey

*GDP, groos domestic product, measures the total annual valueof all goods and services produced within a country.

**Includes national and local taxes and Social Security contributions

Chapter 17: Economic Policymaking

I. Government and the Economy pg. 542A. Introduction

Capitalism / Communism / Mixed EconomyB. Unemployment and Inflation

Consumer price indexC. Elections and the Economy

Incumbents (esp. prez) held accountable for bad economy

Voters care more about unemployment than inflation

D. Political Parties and the EconomyReps more worried about inflationDems more worried about unemployment

Chapter 17: Economic Policymaking

II. Policies for Controlling the Economy pg. 548A. Introduction

Laissez-faire / FDR / ReaganB. Monetary Policy and the Fed

Fed manipulate the supply of $$ & credit availableRaise / lower interest ratesSet reserve ratesBuy / sell gov’t bonds

C. Fiscal Policy: Keynesian versus Supply-Side EconomicsBottom up: spend to get out of recession & worry

about deficits laterTop down: tax breaks @ the top will “trickle down”

Chapter 17: Economic Policymaking

III. Obstacles to Controlling the Economy pg. 552Budgets prepared in advancePrivate sectorUncontrollable expendituresIV. Arenas of Economic Policymaking pg. 556A. Business and Public Policy: Subsidies Amid

RegulationsB. Consumer Policy: The Rise of the Consumer

LobbyFTC & FDA & CPSC

C. Labor and GovernmentNational Labor Relations Act 1935Taft-Hartley Act 1947

Chapter 17: Economic PolicymakingD. New Economy, New Policy ArenasV. Understanding Economic Policymaking pg.

559A. Democracy and Economic Policymaking

Voters have used democratic processes to avoid Marxist revolution

B. Economic Policymaking and the Scope of Government

Chapter 18: Social Welfare Policymaking

I. What Is Social Welfare & Why Is It So Controversial? pg. 566

Means-tested v. Entitlement programsII. Income, Poverty, and Public Policy pg. 568A. Who’s Getting What?

Income v. wealthB. Who’s Poor in America?

The poverty lineC. What Part Does Government Play?

Progressive v. proportional (flat) v. regressive taxes

Earned Income Tax Credit

Chapter 18: Social Welfare Policymaking

III. The Evolution of American Social Welfare Programs pg. 574

A. IntroductionB. The New Deal and the Elderly

Social Security Act of 1935C. President Johnson and the Great Society

Medicare 1965D. President Reagan and the Limits to the Great

SocietyE. President Clinton & Welfare Reform in the 1990s

TANF Find work within 2 yrs.5 year lifetime max.States get Block Grant to run their own programs

IRS Tax Rates 2009: Progressive Tax

If taxable income is

over…But not over… The tax is:

$0 $8,350 10%

$8,350 $33,950 15%

$33,950 $82,250 25%

$82,250 $171,550 28%

$171,550 $372,950 33%

$372,950 No limit 35%

Chapter 18: Social Welfare Policymaking

IV. The Future of Social Welfare Policy pg. 576A. Entitlement Programs: Living on Borrowed

Time? pg. 578B. Means-Tested Programs: Do They Work?C. Social Welfare Policy Elsewhere pg. 582V. Understanding Social Welfare Policy pg. 584A. Democracy and Social Welfare

Recipients of means-tested programs aren’t politically active

Recipients of entitlement programs are! (AARP)B. Social Welfare Policy and the Scope of

Government

Chapter 19: Policymaking for Healthcare & the Environment

I. Health Care Policy pg. 590A. The Health of Americans

Life expectancy & infant mortality rateB. The Cost of Health Care = 1/7 of GDP

Expensive procedures Malpractice suits Insurance masks true costs Costly prescription drugsAging population

Health Care Spending in Selected Democracies

46%

67%

70%

70%

70%

73%

74%

76%

76%

77%

78%

78%

83%

84%

84%

84%

88%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

United States

Australia

Canada

Switzerland

Italy

Netherlands

France

Spain

Germany

Finland

New Zealand

Japan

Norway

Sweden

Denmark

Britain

Belgium

Pe

rce

nta

ge

of

To

tal H

ea

lth

Ca

re S

pe

nd

ing

by

Go

ve

rnm

en

t

Percentage

Chapter 19: Policymaking for Healthcare & the Environment

C. Access to Health Care HMO’s

D. The Role of Government in Health Care pays about ½ the health care bill)MedicareMedicaidHealth Care for Vets

E. Policymaking for Health Care

Chapter 19: Policymaking for Healthcare & the Environment

II. Environmental Policy pg. 600A. Economic Growth and the EnvironmentB. Environmental Policies in America

EPAEnvironmental Impact StatementsClean Air Act 1970 (Emissions Trading)Water Pollution Control Act 1972Endangered Species Act 1973

C. Energy, the EnvironmentD. Toxic Wastes & the Superfund

Yucca Mtn.??

Chapter 19: Policymaking for Healthcare & the Environment

E. Making Environmental PolicyConcern over Climate ChangeThe Kyoto Protocol??III. Understanding Health Care &

Environmental Policy pg. 610A. Democracy and Health Care and

Environmental PolicyB. The Scope of Government and Health

Care and Environmental Policy 

Sources of Energy in the US

Other5%

Natural gas22%

Petroleum37%

Renewable6%

Nuclear8%

Coal22%