1. US Policy
Domestic: internal issues – laws, government planning and actions
Economic: money issues
Foreign: dealing with other nations

2. The Policy Process

3. Opening: Immigration
What method for enforcing immigration law do you believe would be most effective: holding employers who employ illegal immigrants or other ineligible workers accountable, holding individuals accountable through criminalization, requiring proof of citizenship or legal status for all services, or some other method. Why did you make that choice?

4. Economic Terms Inflation: prices and wages rise
Consumer Price Index (CPI) – measures change in prices over time
Recession: economy in bad shape for 2 consecutive quarters
Depression: severe recession
Unemployment: Those actively looking for job but can’t find one
Full employment: 5% unemployment
Laissez-faire: government does not get involved with economy
Instead of government – have free competition in markets = capitalism
Business cycle: Growth and slowdown in economy

5. Government Involvement
Keynesian Economic Theory (Democrats – percolate up: help needy)
John Maynard Keynes – Great Depression
Government should tax and spend to support the economy
Ex: Government spending on infrastructure
Supply-Side Economics (Republicans – trickle down: help rich)
1980s – Ronald Reagan - recession
Reduce government regulation and cut taxes = businesses produce more products and hire more people
Oversupply of products will drive prices down
Government will get more taxes from businesses and individuals

6. Economics and Politics
President in office is blamed/credited with economy
Federal Reserve System (The Fed): INDEPENDENT regulatory agency the regulates the amount of money in circulation:
Board of Governors – 7 people appointed by president
Federal Open Market Committee – decides how monetary policy should be carried out
Controls money supply
Lower interest rates = more borrowing and stimulates businesses and buying
Loose – low interest rates
Tight – high interest rates (bring down inflation)

7. Globalization: Economics and the World
Companies have outsourced – make products in other countries
Issues: Wages of workers overseas, Environmental standards, Lost US jobs
Balance of trade is often negative – US imports more than exports
2013: Imports: $2.7 trillion/Imports $2.3 trillion
Free Trade: no tariffs or import quotas
North American Free Trade Agreement (NAFTA) 1993 – Canada, US, Mexico
Central American-Dominican Republic Free Trade Agreement (CAFTA-DR)2005
World Trade Organization (WTO) 1997 – 159 member nations
Settle trade disputes