Study guide 2nd exam PUP 3002 NOTE material from Ch 11 is not going to be covered on this test 1 School choice being able to decide which school you send your child to not just being forced to send your child to the neighborhood or district school Not favored by teachers unions less influence favored by republicans Promotes competition for students in schools it works 2 High stakes testing assure people have basic core of information could be barrier to graduation main focus of No Child Left Behind Problems teachers teach the test waste of class time economic problems very expensive no way to calculate 100 of all costs who should pay for it But without standardized tests what markers 3 No child left behind 1 2002 Biggest Federal intervention into education initially popular with democrats and republicans but now not with either education taken for granted most are products of public education yet it is criticized widely Top Down program created federally administered tests for all schools receiving federal funding failure to meet goals had costs after 4 years of failing provided opportunity for students in poor schools to transfer Does it work At elementary level reading and math is up 25 of school districts receiving funding had at least 1 failing school Is it Fair poorer more urban and racially diverse schools have more trouble reaching goals 2 Replaced by Race to the Top Obama Administration more bottom up promotes merit pay and charter schools uses complex point system to determine federal funding 4 Moral hazard The theory that someone who is insulated from risk is going to behave differently than from someone who is fully exposed to risk because the risk taking individual does not see themselves as taking the full consequences of their actions this comes in to play with health insurance where people have extremely small co pay or premium prices and therefore act risky because they know it is not going to be very costly to them whereas someone who pays for everything out of pocket is less likely to be risky in order to prevent excessive expenses 5 Adverse selection refers to a market process in which bad or negative results occur because buyers and sellers are exposed to asymmetric or uneven information Skimming 6 AFDC Aid to Families with Dependent Children welfare program from 1965 to 1977 TANF Temporary Assistance for Needy Families came from welfare reform legislation of 1996 under 2nd Clinton administration 7 PRWORA Personal Responsibility and Work Opportunity Reconciliation Act tied federal grants to past state spending so the generous states under AFDC were grandfathered into better transfers from the national government requires work time limit on benefits more state discretion teenage parents must live with their own parents or other adults Policies enacted seemed to have affected low income women more strongly with lower unemployment and greater income 8 SSI provides benefits to aged disabled blind and families that lose provider to accidental death etc Issues Equity is regressive but poor get a higher return on their investment is indexed to inflation Also an entitlement program but redistributes across generations As the population ages so does equity issues SS Trust Fund collections that exceed pay outs are placed in a trust fund it is solvent until 2037 9 Medicare Social Insurance program administered by US government providing health insurance coverage to those aged 65 and older 10 Medicaid Income assistance for the poor for medical expenses it is a means tested program that is jointly funded by states and the federal government largest source of funding for medical and health services for people with limited income in the United States 11 Unemployment rates natural current not distributed evenly by race and age impacts government budgets loss of revenue and increase in expenditures Jobs can substitute for social welfare programs future changes in job sectors Natural Unemployment determined by the economy s supply side or production possibilities and economic institutions therefore if there are mismatches in the labor market or real wages then the natural rate of unemployment may be voluntary Current Unemployment extremely high sitting above 9 average for the U S 12 School finance Biggest question mark is who should pay for cost of education Sources of Funding local property taxes Rethinking Revenue Sources Sales Tax property tax redistribution across districts 13 Property tax current course of some education funding Problems it falls behind inflation inelastic and not equitable because it varies across states and within states 14 Sales tax properties 15 1996 Welfare Reform put more independence in states and less federal funding Came about because it didn t require work for money some claimed that some women had children for more money also institutional problems stigmatized recipients and provided work disincentives 3 Goals enforce work requirements reduce dependency promoting marriage 16 SCHIP State Children s Health Insurance Program designed with the intent to cover uninsured children in families whose incomes that are modest but to high to qualify for Medicaid 1997 17 Fiscal policy One approach of Economic Policy tax and spend supply side economics pushes for lowing marginal tax rates and lessening regulation 18 Monetary policy Another approach of Economic Policy focuses on micromanaging money supply and lowers and raises interest rates in sync with contractionary and expansionary periods 19 Health insurance coverage in the US who has it who doesn t Private employment based insurance the norm 60 Medicare for elderly and Medicaid for the poor 50 million Americans uninsured at any moment in time Uninsured greatest for Hispanics then blacks then Whites 20 ERISA Employee Retirement Income Security Act of 1974 mandated no state regulation of self insured or plans bought from firms operating nationally 21 Inflation an increase in the cost of goods and services Consumer Price Index CPI represents average change in price over time of a variety of goods and services 22 Single payer system Medical care funded from a single insurance pool run by the state universal health care can be financed from a pool in which many people have contributed Taiwan Example looked for best solution to increase coverage at lowest cost decided on single payer Canadian model 23 Public option The public health insurance option is a proposed government run health insurance agency which
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