DOMESTIC POLICY nations What distinguishes domestic policy from foreign policy Domestic policy consists of all government programs regulations that directly affect those living within a country Foreign policy involves relations with other What are the stages of policy making What do they involve Agenda setting Making an issue visible so that important political leaders take it seriously Systemic Agenda public outcry no government response Institutional Agenda elected officials take it seriously take legislative action Policy deliberation debate discussion by groups political leaders about issues places on the policy agenda Final policy is intended to balance the interests of different groups Policy implementation translation of legislation into set of government programs regulations Policy enactment passage of laws by public officials Requires negotiation bargaining compromise Policy enactment passage of laws by public officials Requires negotiation bargaining compromise Implementation techniques Authoritative people s actions are restrained by government Incentive offers financial incentive for compliance Capacity provide with appropriate resources Hortatory appealing to people s better instincts Policy outcome effect of policy outputs on individuals businesses Evaluated by congressional committees presidential commissions interest groups academics What group is eligible for social security Social Security is a social insurance program for seniors the disabled Details born before 1937 full benefits at 65 born in 1960 or after full benefits at 67 can receive benefits at 62 but will be reduced How is it paid for By payroll taxes 6 2 of every pay check employer matches percentage Max taxable earnings 117 000 Pay as you go structure payments to current retirees are made from current payments into the system What group is eligible for medicare Elderly How is it paid for not eligible for free benefits Funded by payroll taxes Employee pays 1 5 of wages employer matches Also other sources like interest on social security income premiums for people Is public opinion about social security medicare positive or negative promised They hope to benefit themselves one day Positive People generally support benefits for senior citizens and believe that since seniors contributed to the benefit they should be guaranteed the benefits Are programs for the young poor as well funded as those for the elderly No The government spends twice as much on social security medicare than all young poor programs combined Is education primarily controlled at the federal or local level Bulk of control at local state level The state determines school curriculum School funding is determined by local property taxes Local boards have flexibility in how to implement state federal guidelines How does the United States fair in terms of educational achievement when compared to other countries We are worse off than other countries in terms of educational outcomes relative to expenditures Out of 35 developed countries US slipped from 11th to 21st in reading 17th to 20th in science and 25th to 34th in math The US is 16th out of 26 developed countries in college graduation rates Holds poorly functioning schools accountable by reporting them to the public potentially closing them Proponents argue test scores have improved and poor performing students are getting greater attention Opponents argue students are taught the test states have too much control over tests and poor performing students are often pushed out Parents given vouchers to pay for students to enter schools of choice can enroll in private or public schools No Child Left Behind Became law in 2002 Set national standards Involves far more federal involvement Heavy reliance on standardized testing Charter school Local board issue charters for outsiders to establish schools The school determines curriculum hiring other decisions Voucher System ECONOMIC POLICY Gross Domestic Product GDP Measure of total economic activity in a nation over the course of a year Business Cycle Alternating periods of economic growth and economic slowdowns Reduction in GDP growth for two quarters 6 months Recession Inflation Unemployment Who is included among the unemployed answered together Typically 4 6 currently approximately 6 7 Measured through consumer price index which tracks the costs of essentials over a period of time Total number of citizens currently seeking employment but are without a job divided by total number of people in the workforce Government conducts a monthly national survey to calculate unemployment Fiscal Policy The sum total of government taxing spending which determines whether government revenues exceed expenditures Budget government s annual plan for taxing spending Deficit the amount by which annual spending exceeds revenue Surplus the amount by which annual revenue exceeds spending National Debt Currently the national debt is almost 12 trillion dollars Approximately 73 of GDP Our debt is considered moderate compared to other advanced nations Japan Italy have proportional debts that are more than twice as large Keynesianism Economic policy based on the belief that government spending can be used to jump start the economy FDR broke with traditional belief in a balanced budget and ran large deficits during the 1930s to get the economy moving again Reduction in tax rate will generate overwhelming economic growth that will produce the same level of government revenue Supply Side Economics Applied during Reagan administration Led to significant budget deficits during the 1980s Reagan eventually increased taxes to balance budget Monetary Policy or Monetarism Efforts taken by government to vary the supply of money in the economy to stabilize the business cycle If money supply increases too quickly then you will have inflation If money supply decreases there is less money to spend and invest economy slows What are the responsibilities of the Federal Reserve Federal reserve is responsible for controlling money supply Control interest rates Control bank reserves Tax Burden The total level at which Americans are taxed Large tax cuts over the last 10 years One reason for increased federal deficit Tax Base The income property wealth or economic activity that is taxed Some support more broad based taxes For example sales taxes sin taxes Tax preferences special tax treatment received by certain activities property or investments Structure in which tax rate depends on amount