UNIT 6: PUBLIC POLICY

Government and the Economy An undeniable tension exists between capitalism and democracy: The capitalist marketplace rewards and encourages inequities that threaten democratic beliefs about individual equality, if unchecked; The potential for greater exercise of influence by the wealthy weakens the concept of one person, one vote

Economic Tools Fiscal policy – government decisions on how much money it will spend and how much tax it will levy; The president is assisted in making these kinds of decisions by: The Secretary of the Treasury; The head of the Office of Management and Budget; The chair of the Council of Economic Advisers

Monetary Policy Attempts to regulate the economy through control of short-term interest rates and the supply of money. Policy is made by: the Federal Reserve Board; and the Federal Open Market Committee; Fed members are appointed by the president with Senate consent; The chairman is appointed for 4 year terms

What Can Be Done? Discretionary spending – amounts in annual appropriation bills established by members of Congress in any year; Mandatory spending – mandated by permanent laws which Congress must spend by law and is therefore more difficult to control

Using Economic Policy to Achieve Political Goals Conservatives and Republicans are generally more tolerant of high unemployment than are liberals and Democrats; Both sides play politics in congressional districts: Democrats spend more in their favored districts when they are in power; Republicans spend more in their favored districts when they are in power

Conclusion Government can help protect us from recession and depression, as well as create jobs, and guarantee minimum wages and safety conditions; How we use fiscal and monetary policies depends on what we want to see and may not be in the best interests of Americans

The Bases of Social Welfare Policies Social welfare policy – direct or indirect government subsidies for individuals and families, who are often grouped by categories; Direct subsidies – payments government makes to individuals by checks, vouchers, or credits; Indirect subsidies – goods or services provided by the government to the public or to a specified group at below market value

The Evolution of Social Welfare Policies Government became involved in the economic development of the country in the 19 th Century; Individual benefits were first provided as part of the New Deal programs of the 1930s; U.S. social welfare programs are largely uncoordinated efforts

Federal Programs for the Poor Means tests – required of participants in an exclusive program to show that they are poor and therefore qualified for assistance; Supplemental Security Income (SSI) – income support for the blind, disabled, and elderly not covered by Social Security; Temporary Aid to Needy Families (TANF) – created in 1996 to replace AFDC

Tax Subsidies Corporate welfare – “any action by local, state, or federal government that gives a corporation or entire industry a benefit not offered to others” including: Services; Low-interest loans; Grants; Concessions of land; Tax exemptions; Deferrals; Lowered rates

Conclusion Government is often hyperresponsive to citizen demands/needs; There is no overarching government policy or philosophy about involvement in social welfare policy; Does government assume too much risk for individuals/businesses, and is there too much risk for the powerful rather than the weak?

Foreign Policy Goals Protecting our national security; Help protect the physical security of our neighbors and major democratic allies; Protect our economic security; Extend our sphere of influence

Making Foreign Policy in a Democracy Despite agreement on general goals there is almost always disagreement over the fundamentals as well as the primary issues to be addressed.

Instruments of Foreign Policy, I Diplomacy: The president as chief diplomat; The State Department and its missions: 260 diplomatic missions; Ambassadors represent presidential policy to other nations

Instruments of Foreign Policy, II Intelligence gathering: 15 agencies involved; A combined budget of approximately $40 billion; Nearly 80% of the budget under the control of the Department of Defense; Intelligence agencies are good at collecting information but very poor at translations and analysis, and disastrous at interagency information sharing

Instruments of Foreign Policy, III Military instruments: The end of the Cold War brought about an end of reliance on nuclear weapons; New questions emerged about military training and armaments appropriate for the 21 st Century; The Pentagon’s new doctrine of asymmetrical warfare; Military options are now limited without a draft

Economic Instruments Achieving economic goals of foreign policy requires: Trade and the debate between protectionism and free trade; Economic sanctions which are rarely used against large or strong countries; Foreign Aid which takes the form of grants, technical assistance, or guaranteed loans

Defining Security in the Global Age Security issues are more likely today to be about preventing terrorism or the spread of nuclear weapons; Globalization has intensified the threat of terrorist attacks which led the Clinton administration to pursue health, education, and environmental protection in developing countries as important.

Conclusion The public is more involved in foreign policy issues than in the recent past due to the threats to our security; Foreign policy makers give at least the appearance of being responsive to the public’s interests.