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Economic Policy

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Economic Policy Chapter 18 Roots of Economic Policy The early years of our nation were marked by a _____ economic policy. Interstate Commerce Commission (ICC ... – PowerPoint PPT presentation

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Title: Economic Policy


1
Economic Policy
  • Chapter 18

2
Roots of Economic Policy
  • The early years of our nation were marked by a
    _____________ economic policy.
  • Interstate Commerce Commission (ICC)- 1st attempt
    at govt _______________ in 1887.

3
Consumer Protection(Progressive Era)
  • Sherman Anti-Trust Act of 1890
  • ______________________ Act (1906)
  • Federal Reserve Act (1913)

4
Great Depression/ New Deal
  • The economy collapsed in _________
  • FDRs New Deal created programs that were
    supposed to safeguard our _________.
  • Laissez faire replaced with interventionism-
    govt having an ______ role in the economy

5
Government Regulation
  • The decades of the 1930s thru the 1970s were
    marked by economic and social _________________.
  • Social activism combined with _____________
    politicians led the way for government regulation.

6
Deregulation
  • A reduction in market ________ in favor of market
    based competition began in the mid 1970s.
  • Starting with Jimmy Carter, most presidents have
    continued to ____________ industries with mixed
    results.

7
Fiscal Policy
  • Congress controls Fiscal policy- government
    _________________, revenues, and debt
  • It is conducted through the federal budget
    process.

8
The Budget
  • The Budget Account Act of 1921
  • This created the OMB and delegated budget power
    to the President.
  • The ___________________ Budget Act of 1974
  • This created new procedures for the budget.
    First, the President submits the budget. Then,
    the House and Senate budget committees analyze
    the budget with the Congressional Budget Office
    (CBO).
  • 2/3 of spending is on entitlements A government
    program that guarantees and provides benefits to
    a particular group. This is uncontrollable
    spending.

9
Budget
  • The primary purpose of the budget is to _________
    government programs.
  • Most spending goes toward national defense and
    human resource spending.
  • Mandatory vs ________________ spending

10
Entitlements
  • _________________ programs are benefits paid to
    American citizens who meet criteria set by the
    government.
  • Examples _______________, medicaid, food
    stamps, etc.

11
Social Security
  • Insurance for the unemployed and _______
  • insurance program- created for the unemployed and
    the elderly
  • Everybody would be taxed and all would be
    eligible for insurance
  • Assistance program- created for the blind,
    dependent children, and aged
  • Only poor ( by the ________ test) are considered
    for assistance

12
Problems with social security
  • 1) baby boomers reaching retirement age
  • 2) not as many ____________ as recipients
  • 3) payouts not progressing with cost of living
    increases
  • Surplus projected to _____________ in next few
    years.

13
Deficits/Debt
  • Deficit- expenditures gt revenues
  • Debt- collection of yearly deficits
  • Most our our ________ is owned by China

14
Monetary Policy
  • The Federal Reserve System (the Fed) manages
    monetary policy
  • They control the money __________ and interest
    rates.

15
Machinery of Economic Policy Making
  • There is fragmented policy-making that is not
    under the presidents full control because within
    the __________________________, numerous
    organizations influence policy.
  • Congress is most important in __________ policy
    making. It approves all taxes and most ________.
    It consents to wage and price controls. It can
    influence the Fed by threatening to reduce it
    powers.

16
Path to Reducing Spending
  • The Gramm-Rudman Balanced Budget Act of 1985 was
    __________________.
  • New Strategy of 1990
  • If entitlements increase, then taxes have to
    increase

17
Levying Taxes
  • Policies on Taxing
  • The tax burden is too low on citizens, however,
    there are loopholes for industry (client
    politics).
  • The rise of Income tax
  • The __________ amendment (1913)
  • Usually, taxes increase during ____________ and
    decrease during peace.
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