Political Agenda And Economic Policy

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The Courts

Back 1

make decisions that force action by other branches. Courts facilitate change when there is no popular majority.
ex- school desegregation, abortion

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Bureaucracy

Back 2

More professional, more trusted
Pro-active view

Front 3

Senate

Back 3

active compared to past
source of presidential candidates' new ideas

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Media

Back 4

moves ideas onto agenda
lets people know what issues are important

Front 5

Cost and Benefits of proposed policy

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COST- any burden monetary or not
BENEFIT- any satisfaction monetary or not

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Politics is

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A process of disputes over cost vs. benefits and who benefits. People prefer programs that provide benefits at low costs.

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Majoritarian Politics

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distributed benefits, distributed costs
(large groups, appeals to large blocks of voters)
Debate conducted in ideological terms ex- military benefit

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Interest group politics

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concentrated benefits, concentrated costs
debate without public involvement
carried on by interest groups
ex- labor vs. business

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Client Politics

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Concentrated benefits, distributed costs
breaks from American government
relatively small groups benefit, beneficiaries are "clients" of government
ex-sugar growers

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Entrepreneurial politics

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distributed benefits, distributed costs
ex- a superfund force an industry to play money

*ralph nader consumer

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both were created to break up trusts/monopolies

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Sherman Act (1890)
Clayton Act (1914)

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Interest groups business regulation

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labor unions (dem) vs. management (rep)

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NLRB

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National Labor Relations Board- created by the govt made of member board that has five year term- appointed by pres approved by congress

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OSHA

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Occupation Safety and Health Administration

(OSHA and NLRB benefit workers not management)

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clean air act is

Back 15

a direct result of Entrepreneurial politics

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types of argument

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here and now-instant gratification
cost argument- cost is always going to affect benefits

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Values

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most concerned with self-interest

Front 18

Deregulation

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govt regulation bad for competition/consumer
reducing subsides for tobacco growers
recent presidents are moving towards deregulation costs starting w/ford (rep)

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Economic Ideology

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Dems want to reduce unemployment
Reps want to reduce inflation

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Fiscal v. Monetary

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Congress controls fiscal policies (govt expenditures, revenues and debts)

The Federal Reserve Board (The Fed) controls the monetary policy (money supply and interest rates)

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Monetarism

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Inflation is caused when too much money is chasing too few goods. The govt should increase $ supply at rate of ec. growth and control the $ in ec. by making sure prices are not too high or low (the fed)

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Keynesianism

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Ec. needs ppl to spend $ to save $. The govt should put money into the ec. if we're not spending enough and tax or inflate the ec. if we spend too much

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Supply-side tax cuts

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lower taxes help investors. With more money, we spend more and the economy is good.

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Reaganomics

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A combination of supply-side tax cuts, monetarism, and domestic budget cutting. Reduces size of fed govt while increasing military strength. (effect= military increased, nat debt increased and unemployment rate decreased)

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congress is

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mot important in economic policy making. Consents to wage and price controls- can influence Fed by threatening to reduce powers.

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Council of Economic Advisors (CEA)

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Forecast ec. trends and prepare the annual ec. report that president sends to congress.

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Secretary of Treasury

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reflects view of financial community and provide estimates of govt revenues

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Office of Management and Budget (OMB)

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prepare estimates or amounts spent by govt agencies and ensure legislative proposals are compatible with pres's program (most impt bureaucratic agency)

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The Federal Reserve Board (The Fed)

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7 members that serve 14 yr terms, somewhat independent organization that controls interest rates and money supply.

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Budget Account Act 1921

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Created OMB and delegated budget power to the president

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The Congressional Budget Act of 1974

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Created new procedures for the budget. First, the President submits the budget. Then House and Senate budget committees analyze the budget with Congressional Budget Office (CBP)

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The Gramm-Rudman Budget Act of 1985

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unsuccessful

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New Strategy of 1990

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If entitlements increase, taxes have to increase

Front 34

Policies on taxing

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tax burden is too low on citizens, however, there are loopholes for industry (client politics)

Front 35

the rise of income tax

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the 1th amendment (1913)
usually, taxes increase during wartime and decrease during peace