Title: How does government create plans to address the needs of society?
1How does government create plans to address the
needs of society?
LESSON 8 Public Policy
2What is public policy?
- PUBLIC POLICY All of governments actions and
programs that address issues and problems in
society or work toward a national goal - Five stages of creating policy
- Recognizing the problem
- Formulating the policy
- Adopting the policy
- Implementing the policy
- Evaluating the policy
- ELEMENTS OF PUBLIC POLICY
- Economic policy
- Domestic policy
- Foreign policy
3How does public policy apply to economics?
- CREATION OF ECONOMIC POLICY
- American economy runs on premise of free
enterprise - Governments involvement with economy in history
- ADAM SMITH (The Wealth of Nations) Marketplace
governed by supply and demand ? existed until
1930s - Roadblock to free enterprise GREAT DEPRESSION
- POST DEPRESSION (New Deal)? KEYNESIAN ECONOMICS
(government must spend and invest when private
industry cant or wont) - 1980s Return to supply-side economics ?
trickle-down theory
4How does public policy apply to economics?
- MONETARY POLICY Governments control of the
money supply - TOO MUCH MONEY? Inflation sets in and prices go
up - TOO LITTLE MONEY? Deflation the driving up of
the value of a dollar - FEDERAL RESERVE SYSTEM (the Fed) Regional
banks that control bank deposits and amount of
money available on market
5How does public policy apply to economics?
- FISCAL POLICY How the government raises and
spends its money - KEYNESIAN ECONOMICS Government must spend to
spur economic growth even if it has to borrow - SUPPLY-SIDE ECONOMICS Let business reinvest its
wealth to spur economy (trickle-down approach) - Provide tax cuts to people and companies
- RISKY! Huge deficits generated by cutting taxes
6How does government raise money to pay for public
policy?
- PAYING FOR PUBLIC POLICY
- FEDERAL INCOME TAX Largest source of federal
revenue - Progressive (graduated) tax The more money you
make, the higher percentage you pay - People and companies provide 57 of national
revenue through taxes
7How does government raise money to pay for public
policy?
- OTHER TAX REVENUES
- SOCIAL INSURANCE TAXES (34 of revenue) Payments
for Social Security, Medicare, and unemployment
compensation ? regressive tax that hits poor
harder - EXCISE TAXES Taxes on manufacture,
transportation, sale, or consumption of goods - ESTATE GIFT TAXES Taxes on property and gifts
of money - CUSTOMS DUTIES TARIFFS Taxes on goods imported
into the U.S.
8How does government raise money to pay for public
policy?
- BORROWING
- PRE-DEPRESSION Government acted as creditor
nation rarely borrowed from other countries - POST-DEPRESSION Regular borrowing to finance
budget
Federal debt as of this morning
Federal Debt Clock
9What does the federal government spend money on
anyway?
- GOVERNMENT SPENDING
- Categories of largest amounts of spending
- ENTITLEMENTS Required government payments (SSI,
Medicare, etc.) - NATIONAL DEFENSE Figure now exaggerated due to
Iraq Civil War - NATIONAL DEBT Accumulated debt also includes
heavy interest payments
10What does the federal government spend money on
anyway?
- Other government spending
- Highways
- Housing
- Education
- Foreign aid
- Space exploration (NASA)
11How does the government plan out its budget?
- Federal budget process
- PHASE 1 Estimating needs and making requests
- PHASE 2 Reviewing, revising and submitting
budget - PHASE 3 Developing and approving a
Congressional budget - PHASE 4 Creating a final budget
- No agreement on the federal budget?
- Congress continues to meet until a resolution is
made, or - President can order shutdown of federal
government until budget is settled
12What does the federal government consider when
creating domestic policy?
- CREATION OF DOMESTIC POLICY
- DOMESTIC POLICY Decisions, actions, and
principles that guide governments approach to
problems within the United States - Two types of domestic policy
- Regulatory policy
- Social policy
13What does the federal government consider when
creating domestic policy?
- REGULATORY POLICY Federal government oversees
activities of individuals, businesses, and
government institutions - Regulation of business Abuses by monopolies in
late 19th century led to government intervention - INTERSTATE COMMERCE ACT (1887) Set up Interstate
Commerce Commission, investigating unfair
practices of railroads - SHERMAN ANTITRUST ACT (1890) Made trusts illegal
? vague law - CLAYTON ACT (1914) Set up Federal Trade
Commission (FTC) to enforce illegal monopolistic
practices
14What does the federal government consider when
creating domestic policy?
- Regulation of labor Federal government has acted
to provide safeguards for American workers - WAGNER ACT (1935) Gave workers right to organize
and to collectively bargain with employers - FAIR LABOR STANDARDS ACT (1938) Prohibited child
labor, set maximium work week, and set minimum
wage (1938 ? 25 cents/hour) - TAFT-HARTLEY ACT (1947) Outlawed closed shops
and forbade public employees from striking - LANDRUM-GRIFFIN ACT (1959) Designed to clean up
corrupt unions and allow workers to sue unions - Regulation of environment and energy
Preservation of natural resources has been a goal
since early 20th century
15How does government create public policy to
address social problems?
- SOCIAL POLICY Programs and services where the
federal government assumes full responsibility in
addressing social issues - Key issues addressed by social policy
- HEALTH CARE
- WELFARE
- EDUCATION
- TERRORISM
- ABORTION
- GAY MARRIAGE
- TECHNOLOGY
- CRIME