Economic and Social Welfare Policymaking

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Economic and Social Welfare Policymaking
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Video The Big Picture
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A_1/polisci/presidency/Edwards_Ch16_Economic_and_S
ocial_Welfare_Seg1_v2.html
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Learning Objectives
Identify the main policy tools that American
government can employ to address economic
problems, and contrast Keynesian and supply-side
economics
16.1
Compare and contrast entitlement and means-tested
social welfare programs
16.2
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Learning Objectives
Assess the extent of economic inequality in
America and the role of government in lessening it
16.3
Trace the change over time in major federal
welfare programs
16.4
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Learning Objectives
Outline how Americas Social Security program
works and the challenge of keeping it financially
solvent in the coming years
16.5
Distinguish American social welfare policy from
that of other established democracies
16.6
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Learning Objectives
Assess the impact of social welfare policies on
democracy and the scope of government in America
16.7
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Video The Basics
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A_1/polisci/presidency/Seg2_EconomicPolicy_v2.html
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16.1
Economic Policymaking

• Two Major Worries Unemployment and Inflation
• Policies for Controlling the Economy
• Why It Is Hard to Control the Economy

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16.1
Two Major Worries Unemployment and Inflation

• Unemployment rate
• 10 in Great Recession
• Underemployment rate
• Tracked by Bureau of Labor Statistics (BLS)
• Inflation
• Rise in price of goods and services
• Consumer price index (CPI)
• Averages 4

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16.1
Policies for Controlling the Economy

• Laissez-faire
• Monetary policy and the fed
• Federal Reserve Board
• Meets in secret not accountable to Congress
• Manipulating the amount of money

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16.1
Policies for Controlling the Economy

• Fiscal policy Keynesian v. supply-side economics
• Taxing, spending, borrowing
• Keynesian economic theory
• Supply-side economics

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16.1
Chairman of the Fed, Ben Bernanke
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16.1
FIGURE 16.1 How the Obama administrations
predictions of the impact of the 2009 stimulus
plan went awry
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Video Thinking Like a Political Scientist
16.1
http//media.pearsoncmg.com/ph/hss/SSA_SHARED_MEDI
A_1/polisci/presidency/Seg4_EconomicPolicy_v2.html
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16.1
Why It Is Hard to Control the Economy

• Political business cycle
• Presidents control economy to win elections
• Private sector dominates economy
• Federal government is ¼ of GDP
• Impact of government policies gradual

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16.1
16.1 Laissez-faire economic theory holds that
government intervention in the economy

1. Is needed during recessions and depressions
2. Is key to preventing inflation
3. Is detrimental to economic growth and prosperity
4. Is necessary only when interest rates are too high

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16.1
16.1 Laissez-faire economic theory holds that
government intervention in the economy

1. Is needed during recessions and depressions
2. Is key to preventing inflation
3. Is detrimental to economic growth and prosperity
4. Is necessary only when interest rates are too high

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Video In Context
16.1
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A_1/polisci/presidency/Seg3_EconomicPolicy_v2.html
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16.2
Types of Social Welfare Policies

• Biggest government expense
• Only 17 goes to poor

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16.2
Types of Social Welfare Policies

• Entitlement programs
• Social Security, Medicare
• Largest and most expensive

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16.2
Types of Social Welfare Policies

• Means-tested programs
• Food stamps, Medicaid
• Fear of dependency

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16.2
16.2 Which of the following is an example of an
entitlement program?

1. Food stamps
2. Medicaid
3. Postal service
4. Medicare

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16.2
16.2 Which of the following is an example of an
entitlement program?

1. Food stamps
2. Medicaid
3. Postal service
4. Medicare

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Explore the Simulation You Are the Federal
Reserve Chair
16.2
http//media.pearsoncmg.com/long/long_longman_medi
a_1/2013_mpsl_sim/simulation.html?simulaURL18
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Explore Economic Policy Who Broke the Economy?
16.2
http//media.pearsoncmg.com/long/long_edwards_mpsl
gia_16/pex/pex16.html
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16.3
Income, Poverty, and Public Policy

• Whos Getting What?
• Whos Poor in America?
• How Public Policy Affects Income

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16.3
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16.3
Whos Getting What?

• Income distribution
• Sense of justice and equality in a democracy
• Relative deprivation increasing
• Wealth versus income
• Income is amount collected in given time
• Wealth is value of assets
• 1/3 of wealth held by 1
• 1/3 held by 90

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16.3
FIGURE 16.2 Increase in income inequality and
the rise of the top 1
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16.3
Whos Poor in America?

• Poverty line
• 11,139 in 2010
• 46.6 million Americans poor in 2010
• 15.2 of population
• Demographics of poverty
• Feminization of poverty

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16.3
If landmass were divided like wealth
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16.3
FIGURE 16.3 Poverty rates for persons with
selected characteristics, 2010 A comparison of
the official and supplemental measures
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16.3
How Public Policy Affects Income

• Taxation
• Progressive
• Proportional
• Regressive

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16.3
How Public Policy Affects Income

• Government Expenditures
• Transfer payments
• Social security, unemployment benefits, food
  stamps, etc.

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16.3
EBT at the farmers market
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16.3
TABLE 16.1 The major social welfare programs
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16.3
16.3 What percentage of Americans live below the
poverty line?

1. 5.3
2. 10
3. 15.2
4. 25.6

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16.3
16.3 What percentage of Americans live below the
poverty line?

1. 5.3
2. 10
3. 15.2
4. 25.6

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Video In the Real World
16.3
http//media.pearsoncmg.com/ph/hss/SSA_SHARED_MEDI
A_1/polisci/presidency/Seg5_EconomicPolicy_v2.html
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16.4
Helping the Poor? Social Policy and the Needy

• Welfare as We Knew It
• Ending Welfare as We Knew It The Welfare Reform
  of 1996

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16.4
Welfare as We Knew It

• FDRs New Deal programs
• Social Security Act of 1935
• AFDC
• Johnsons War on Poverty
• Food stamps

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16.4
Welfare as We Knew It

• Republicans war on dependency
• Welfare queens
• Deadbeat dads
• The undeserving poor/African Americans

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16.4
Ending Welfare as We Knew It The Welfare Reform
of 1996

• Personal Responsibility and Work Opportunity
  Reconciliation Act (PRWORA)
• States would run their own programs
• Two year limit for benefits
• Lifetime maximum of 5 years
• From AFDC to TANF
• Reforms were effective
• Benefit dollar amounts declined
• Number of recipients declined

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16.4
Climb Wyoming
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16.4
FIGURE 16.4 How welfare reform drastically
reduced the welfare rolls
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16.4
16.4 Which of the following was a goal of welfare
reform?

1. Reduce the number of people living in poverty
2. Reduce the number of children who lack medical
   insurance
3. Reduce the number of people receiving welfare
   benefits
4. Reduce the need for job training to get people
   off welfare

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16.4
16.4 Which of the following was a goal of welfare
reform?

1. Reduce the number of people living in poverty
2. Reduce the number of children who lack medical
   insurance
3. Reduce the number of people receiving welfare
   benefits
4. Reduce the need for job training to get people
   off welfare

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16.5
Social Security Living on Borrowed Time

• Growth of Social Security
• Reforming Social Security

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16.5
Growth of Social Security

• Popular program
• Modest benefits
• Average 1,229/month
• Most expensive public policy
• But fiscally sound
• Surplus depleting since 2010
• What is the solution?

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16.5
Reforming Social Security

• Politically difficult
• Older Americans have high voting rate
• Reform proposals
• Bush Put 1/3 into private investments
• Obama
• Increase age to receive benefits
• Lower inflation raises
• Reduce benefits for wealthy recipients
• Raise contribution amounts

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16.5
16.5 Which of the following was a Social Security
reform proposed by President Bush?

1. Lower age to receive benefits
2. Increase contributions
3. Raise age to receive benefits
4. Divert funds to stock market

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16.5
16.5 Which of the following was a Social Security
reform proposed by President Bush?

1. Lower age to receive benefits
2. Increase contributions
3. Raise age to receive benefits
4. Divert funds to stock market

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16.6
Social Welfare Policy Elsewhere

• The European welfare state
• Taxes and benefits
• Individual v. government responsibility

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16.6
16.6 What is the main difference in the American
and European attitudes toward poverty?

1. Americans believe poverty is your own fault
2. Europeans believe poverty is a result of
   circumstances beyond your control
3. Both A B
4. Neither A nor B

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16.6
16.6 What is the main difference in the American
and European attitudes toward poverty?

1. Americans believe poverty is your own fault
2. Europeans believe poverty is a result of
   circumstances beyond your control
3. Both A B
4. Neither A nor B

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16.7
Understanding Economic and Social Welfare
Policymaking

• Democracy and Economic and Social Welfare
  Policies
• Economic and Social Welfare Policies and the
  Scope of Government

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16.7
Democracy and Economic and Social Welfare Policies

• Problems of free enterprise addressed via
  democracy
• Government regulation demanded
• Limits to economic freedom
• Groups unequal in political resources
• Policy inertia

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16.7
Child labor
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16.7
Economic and Social Welfare Policies and the
Scope of Government

• Liberals and conservatives disagree
• Liberals advocate more govt. intervention
• Conservatives want less
• Welfare state too big or too small?
• Depends which side you are on

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16.7
16.7 The viewpoint that the welfare state is too
large and serves an undeserving clientele is
likely to be espoused by

1. A liberal
2. A conservative
3. Both
4. Neither

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16.7
16.7 The viewpoint that the welfare state is too
large and serves an undeserving clientele is
likely to be espoused by

1. A liberal
2. A conservative
3. Both
4. Neither

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Discussion Question
What tools does the government possess to
intervene in the economy? Who wields these tools
and how effective are they in improving economic
growth? Why do conservatives and liberals
disagree about social welfare policy?
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Video So What?
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ocial_Welfare_Seg6_v2.html
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Further Review On MyPoliSciLab

• Listen to the Chapter
• Study and Review the Flashcards
• Study and Review the Practice Tests