DOMESTIC POLICYWhat 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 othernationsWhat 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 groupsPolicy enactment - passage of laws by public officials Requires negotiation, bargaining, & compromisePolicy enactment - passage of laws by public officials Requires negotiation, bargaining, & compromisePolicy implementation - translation of legislation into set of government programs & regulations 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 instinctsPolicy 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 reducedHow is it paid for?By payroll taxes, 6.2% of every pay check, employer matches percentage Max taxable earnings: $117,000Pay-as-you-go structure, payments to current retirees are made from current payments into the systemWhat group is eligible for medicare?ElderlyHow is it paid for?Funded by payroll taxes. Employee pays 1.5% of wages & employer matches. Also, other sources like interest on social security income & premiums for peoplenot eligible for free benefitsIs public opinion about social security & medicare positive or negative?Positive. People generally support benefits for senior citizens and believe that since seniors contributed to the benefit, they should be guaranteed the benefitspromised. They hope to benefit themselves one day.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 inhow to implement state & federal guidelinesHow 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 ratesNo Child Left BehindBecame law in 2002Set national standardsInvolves far more federal involvementHeavy reliance on standardized testingHolds 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 outCharter schoolLocal board issue charters for outsiders to establish schoolsThe school determines curriculum, hiring, & other decisionsVoucher SystemParents given vouchers to pay for students to enter schools of choice can enroll in private or public schoolsECONOMIC POLICY Gross Domestic Product (GDP)Measure of total economic activity in a nation over the course of a yearBusiness CycleAlternating periods of economic growth and economic slowdownsRecessionReduction in GDP growth for two quarters (6 months)InflationMeasured through consumer price index, which tracks the costs of essentials over a period of timeUnemploymentWho is included among the unemployed?(answered together)Typically 4-6%, currently approximately 6.7%Total number of citizens currently seeking employment but are without a job divided by total number of people in the workforceGovernment conducts a monthly national survey to calculate unemployment Fiscal PolicyThe sum total of government taxing & spending, which determines whether government revenues exceed expendituresBudget - government’s annual plan for taxing & spendingDeficit - the amount by which annual spending exceeds revenueSurplus - the amount by which annual revenue exceeds spending National DebtCurrently, the national debt is almost 12 trillion dollarsApproximately 73% of GDP Our debt is considered moderate compared to other advanced nations Japan & Italy have proportional debts that are more than twice as largeKeynesianismEconomic 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 againSupply-Side Economics Reduction in tax rate will generate overwhelming economic growth that will produce the same level of government revenue 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 slowsWhat are the responsibilities of the Federal Reserve?Federal reserve is responsible for controlling money supply Control interest rates Control bank reservesTax BurdenThe total level at which Americans are taxed Large tax cuts over the last 10 years One reason for increased federal deficitTax BaseThe income, property, wealth, or economic activity that is taxed Some support more broad-based taxes