American Government - Final Exam

Front 1

How does the US government’s role in the economy compare to other developed countries? As discussed in lectures and in the book, there are frequent complaints about “big government” in this country, but is that really true?

Back 1

The size of the public sector in the US govt is comparatively small relative to other industrialized countries. The tax burden on American citizens is light conpared to others, collects a lower proportion of its GDP (in the form of taxes). BIG GOVT refers to regulation. Weak labor unions (11.3% of workforce belong to one). Easier to conduct business here. Usually used to describe govt that are too big/inefficient/corrupt. US govt mostly stays out of private sectors.

Front 2

What is meant by budget deficits and how does this differ from the national debt? How and why have both deficits and the national debt been increasing? The two biggest expansions of both deficit spending and debt occurred in the 1980s and again in the 2000s. What was the primary cause? [Hint: guns, bullets, and missiles; “cut taxes”].

Back 2

BUDGET DEFICITS pump money into economy to encourage more spending. NATIONAL DEBT is the total amount of money that country's govt has borrowed. BUDGET DEFICIT (book) the product of the gove spending more than it collects in taxes. When govt runs deficit, increases national debt. Military spending under Reagan and Bush cause deficit spending and debt to expand. TAX CUTS - wars in Iran and Afghanistan. (1980s = Cold War, 2000s = war on terror)

Front 3

Be able to define what is meant by economic (or fiscal) policy and how this differs from monetary policy.

Back 3

FISCAL POLICY is govt's use of budget to fine-tune the economy- run deficits to stimulate economy and surpluses to slow it down & ward of inflation. (According to textbook: use of budget & process of running deficits or surpluses to manage the economy). MONETARY POLICY is primarily concerned with management of interest rates & the total supply of money in circulation & is generally carried out by central banks such as the Federal Reserve.

Front 4

What is meant by “trickle down economics” (or the “trickle down effect”) and how has it impacted the economy over the past 30 years or so? According to lectures, have the benefits of this economy actually “trickled down”? Why not? What has happened instead?

Back 4

TRICKLE DOWN ECONOMICS is the theory that economic growth would benefit everyone if the wealthy receive tax cuts, but all it has done is make overall economic growth grow weaker. Also, rich have more money to create jobs, but this doesnt usually happen. Lower tax burden & increased investment - business can produce/supply more, increasing employment and woker pay. IT HAS NOT "trickled down" bc wealthy gample money away (stock market/CDOS) instead of putting it back into production so US misses out on benefits that could help economy.

Front 5

What is the Buffet Rule? What does it illustrate?

Back 5

BUFFET RULE is part of a tax plan proposed by Obama - would require those in highest tax bracket to pay higher minimum tax rate to insure they pay greater share of income in taxes than less affluent Americans. Example: Warren Buffet made $700 mil and his secretary made $70 thous but they paid same in taxes. ILLUSTRATES that wealthy know how bad inequality is & that something can be done about it but also that they will do whatever it takes to keep system rigged.

Front 6

Distinguish between mandatory vs. discretionary expenditures (spending)? Relatively speaking, how much of both the federal and California budgets are dedicated to these categories, i.e. is most of the budget mandatory or discretionary?

Back 6

MANDATORY EXPENDITURES: money given to states by the govt that could not be moved bc it was money for entitlement programs like SS and healthcare. $$ that is allocated for exact purposes and cant be used on other things. DISCRETIONARY EXPENDITURES: state govt has ability to move the money around as much as they please.

Front 7

What has happened to payroll taxes in the US relative to corporate taxes? How do TNCs (see #17) avoid paying taxes? How do rich individuals avoid paying taxes? What are the Panama Papers?

Back 7

TNC: transnational companies. The decline in the proportion of fed revenue raised through income, corporate and excize taxes has been compensated for by a raise in payroll taxes. TNCs avaoid paying taxes by moving companies/money around. PANAMA PAPERS are an unprecendented leak of 11.5 m files from database of world's 4th biggest offshore law firm Mossack Fonseca - papers show many ways in which the rich can exploit secretive offshore tax regimes.

Front 8

What is meant by monetarism? Who/what controls monetary policy, that is, what is the Federal Reserve Board? What two mechanisms are used by the Fed to make policy?

Back 8

MONETARISM; controlling the supply of money as a way of stabilizing the economy. CENTRAL BANK controls monetary policy )controlling intrest rates and the decision of buying/selling bonds). FISCAL POLICY is used to manage economy by adjusting govt's budget, how much, and it uses monetary policy to incluence economy by adjusting interest rates. FEDERAL RESERVE BOARD controls monetary policy. Sets Fed policy regarding discount rate and reserve requirements. Uses open markey policy operations & discount rate. DISCOUNT RATE: min interest rate set by FR for lending to other banks. OPEN MARKET OPERATIONS: allows central bank to buy/sell bonds/securities w/in open market.

Front 9

Since 2008, huge amounts of US dollars have been released into the global economy. According to monetary theory, this should lead to inflation. Has it? How can this be explained?

Back 9

NOT WORKING bc big companies arent putting money back into the economy but are gambling w the stock market and CDOS.

Front 10

According to both text and lectures, is there a lot of economic regulation in the US or not? How does this relate to the ongoing influence of iron triangles in American politics?

Back 10

US is one of the least regulated markets in the world. Ranked 20 out of 141 of having least regulated credit, labor and product markets. BP DeepWater Horizon (2009) - floating oil platform drilling for oil and natural gases kill 9 ppl from explosion. Poured lots of oil into water in gulf of Mexico. IRON TRIANGLE CONNECTION: lots of lobbying, testimonies, etc by iron triangle members in agencies and commissions (mass infiltration - they keep US less regulated). SEC did not tighten regulations even after economic crisis from 2008 caused by deregulation.

Front 11

According to lecture (and hinted at in the text), how accurate is it to call the US system a “welfare state”? Be able to briefly describe the history of welfare programs in the US and explain how this history helps explain why the welfare state in the US is different from those of other industrialized (that is, developed) states.

Back 11

US has one of the highest levels of social wlfare spending per capita. Five components: health care spending, education spending, cash retirement benefits, other govt vash transfers (unemployment insurance & the earned income tax credit) non-cash aid (food stamps & public housing). In US social welfare spending draws on public and private resources. In Europe, govt mainly controls resources and benefits. Depends on job and healthcare provided by job. If not, must depend on programs like Obamacare.

Front 12

How does social insurance differ from public assistance? Give an example of each.

Back 12

SOCIAL INSURANCE: govt social-policy programs that are funded by premiums paid by ppl in labor market to support benefits given to participants (Disability Insurance benefits, Medicare benefits, unemployment benefits, etc). PUBLIC ASSISTANCE: welfare-state programs that transfer funds to needy persons and families to help them secure a decent standard of living and become more self-sufficient (Temporary Assistance for Needy Families, Supplemental Security Income, food stamps, housing assistance, etc).

Front 13

What is the significance of the welfare reform that took place in the 1990s (from AFDC to TANF), both with respect to the level of “welfare” actually offered by government and in terms of changing federal government/state relations? As discussed in class, how has this impacted California’s budget?

Back 13

Aid to Families with Dependent Children let states give more money to families to let them survive and recompose selves, TANF gives states a set amount to people based on poverty level by state - families only able to live above poverty line. AFDC is categorical grant ($ has strings to get stuff done) TANF is block grant (just a sum of $ and states allocate as need be). Most of $ goes to schools, benefits for TANF, so no money to spend eslewhere.

Front 14

Give a summary of the “historical welfare state.” When did social programs effectively start in the US (New Deal), and in particular, what was the Great Society program as part of the so-called “War on Poverty”? How/why did the Great Society spur attempts to reduce governmental programs ever since?

Back 14

Great Society Program spurred attempts to make more govt programs ever since bc ppl thought it was too far reaching/govt stepped too far. NEW DEAL & BEYOND (Roosevelt): SS, Townsend Plan, Hams and Eggs Movement. WAR ON POVERTY & THE GREAT SOCIETY: The Great Society Program, Headstart.

Front 15

As discussed, how is the Affordable Care Act (a/k/a Obamacare) not a true governmental health care program?

Back 15

Isn't a true govt health care program bc it doesnt fit into distinctions btwn public and private provisions for social welfaer and btwn social-insurance and transfer policies of welfare state. Subsidizes healthcare to make it more affordable - compared ot paying for all of it. IF states opt out of it, citizens can still sign up && the states must have own healthcare plan.

Front 16

What is meant by globalization? How has globalization also accelerated the gap in wealth between the rich and everyone else? Explain briefly how the gap between rich and poor countries defines the contours of globalization. What role does debt play in keeping developing (i.e. peripheral countries) under the control of the richer, more powerful states (the core)? What are Structural Adjustment Programs (SAPs) that the IMF puts into place when countries have difficulty making debt payments?

Back 16

SAPS (Structural Adjustment Programs): put those countries under SAPS - refinance. By refinancing, there are conditionalities (strings attached). IMF comes in and makes economic policy so country can pay back regardless of what happens to the country. (EX - Vietnam sells rice to foreign countries to pay off debt while they starve.) Banking and Finance want money, dont care for ppl conditionalities of IMF: products from supermarkets are transconditional corporations. IMF is buying up land in Mexico bc farmers are moving there to farm corporations globally - difficult for poorer "bottom" countries. Total debt periphery ~ $3 tril. Rest of world cant print US $, for smaler economies cant print or sell much to get US $, get nowhere w debt, pay off balance, but interest goes unpaid and keeps increasing.

Front 17

What are TNCs and (arguably) how have they become the most important actors in international relations?

Back 17

TNCs avoid regulations like taxes and environmental limitations by moving thier companies and/or money around to continue to make lots of money. This has created the impoverishment & basically enslavement of many countries to these TNCs. IMF consists of TNCs. Free trade makes them v, v powerful.

Front 18

Be able to briefly describe the development of US foreign policy historically, especially why the US took on a more active (and militarized) role in international politics beginning in the 20th century. What is gunboat diplomacy? Was the US necessarily less militarized in the 19th century? The text argues that the US was not very involved in foreign affairs at that time, but think back to our discussion of the development of the American West too. What is isolationism? How did American foreign policy change before and after World War II? What was the Cold War and how did it benefit the US economically as well as politically (see next question too)? How did the Cold War also turn “hot”? What are proxy wars? What was MAD? What is meant by containment?

Back 18

FOREIGN POLICY HISTORY: Pre WWII = isolationism, Post WWII = try to stop communism from spreading. Cold War - Try to win against communism and USSR by all meanse. End of Soviet Union - Expanding capitalism as freedom and this led to Military Industrial complex. Global War on Terror - Bush Doctrine, WMDs, unlawful enemy combatants, "enhanced interrogations," Extraordinaty Renditions.

Front 19

What is the Military-Industrial Complex and what did President Eisenhower say about it in his final year in the White House? How important is the defense industry and weapons production generally to the US economy?

Back 19

MILITARY-INDUSTRIAL COMPLEX: the US' military establishment and those industries producing arms/other military materials, regarded as a powerful vested interest. PRESIDENT EISENHOWER warned of rise of MIC. Generally about 20% of the budget is used for defense purposes. HOwever, there has been increased spending that is not in the budget and is used for increased surveillance and intelligence gathering leading to Military Industrial Surveillance Complex. MIlitary spending not budgeted by govt - instead "borrow" directly from the Federal Reserve - meaning their "loans" ultimately fal into umbrella term of "National Debt" and tax payers end up paying for it. Healthcare and medicare for disabled veterans or even still enlisted injured soldiers not counted as mil spending but rather considered to be welfare.

Front 20

What happened in foreign policy with the fall of the Berlin Wall and the end of the Soviet Union? As discussed in class, was more emphasis placed on democratic or on economic freedoms when the Eastern Bloc fell apart? What was “shock therapy”?

Back 20

SHOCK THERAPY: Jeffery Sachs - in order to get dramatic change in E Europe, ppl needed shock therapy of capitalism. (Agrued that as much privatism and capitalism as possible was neededthere.) To "shock" coutries, would set up markets and companies and throw a lot of money at ppl which they were supposed to spend on investing in the economy. ECONOMIC BUT SOLD AS DEMOCRACY.

Front 21

What has happened during the Bush/Obama years with respect to the global war on terror (the government often uses the acronym GWOT)? What was the Bush Doctrine? What were weapons of mass destruction (WMD), and why were they supposedly important? Were any actually found? What is meant by “unlawful enemy combatants,” and why was this important? What is meant by “enhanced interrogation”? By all international standards, are these interrogation techniques legal? What is meant by extraordinary rendition?

Back 21

ENHANCED INTERROGATION: fancy way of saying tortue. EXTRAORDINARY REDITION: transfer of a detainee to custody of foreign govt for purposes of detention and interrogation. UNLAWFUL ENEMY COMBATANTS: essentially terrorists - enemies of US and allies. During BUSH/OBAMA years, global war on terror reached new heights. BUSH DOCTRINE: US can engage in preemptive strike if there is evidence of and impending attack. WMDs: weapons of mass destruction. Impotant bc US claimed Saddam Hussein harbored & was trying to obtain WMDs as rationale to invade Iraq and oust Hussein (none found).

Front 22

As argued in lectures, what is unique about US foreign policy in the 21st century? Is there an adequate set of policy solutions to the threat of terrorism? This is tied to the decline of hegemony (see p. 384)

Back 22

DECLINE OF HEGEMONY: as the US progresses in the 21st century, the Us cannot expect ot hold the same amount of power it held in the past due to economic, competative and new global forces.

Front 23

In comparing politics to baseball, the text says that while more assets and resources offer structural advantages to the wealthy, “politics still matters” (p. 395). What do they mean? Are they right?

Back 23

Like baseball, just bc you have al ot of $ doesnt mean you will be successful. (i.e. NY Yankees - high payroll, bad team). Just bc you dont have $ doesnt mean you should be disuaded from participating in politics.

Front 24

Philosopher Slavoj Žižek argues--as the book does too--that there is an inherent contradiction between capitalism and democracy. What does he mean and what trends does he see in terms of an expanding global economic system?

Back 24

Democracy is about equality while capitalism is about inequality. Current brand of global capitalism is quickly outgrowing democracy and a divorce btwn the two is inevitable. Leads to an array of social and geopolitical concerns regarding public commons. These probs include (but not limited to) ecology, biogenetics, finance, neo-apartheid, crisis management, intellectual property rights, and personal freedom. In capitalism, democracy is pushed aside bc distr of wealth varies. Larger upper wealthy class, large lower class, small middle class. Capitalsim supposed to create equality.

Front 25

What particular problems are posed by climate change in the 21st century? What is the goal for the international community in terms of its stated goals of stabilizing global warming and in terms of atmospheric carbon dioxide levels, as established at the Paris COP21 meetings in 2015? Can the planet be saved? Note: the discussion of climate change is in Chapter 11.

Back 25

Threats are now climate volatility, spreading water shortages, continuing population growth, spreading hunger, falling states. Goal is to develop alt energy sources, reduce carbon emissions, assist other countries to reduce deforestation. Estimate that US could resolve most major environmental probs at cost of about 20% of military budget.