1. Social welfare policies
Monetary policy: gov’t manipulation of the money supply
Fiscal policy: use of taxes, spending and borrowing to influence the economy

2. Economic theories used by policymakers
Monetarism – supply of money is key to nation’s economic health
Keynesian theory – government spending and deficits can stimulate slow economy
Supply side economics – fiscal policy should stimulate SUPPLY of goods, mainly through lowering taxes

3. Social welfare policies
TAXES – can be progressive, proportional or regressive TRANSFER PROGRAMS – benefits given directly to individuals by government (e.g. food stamps, Social Security)

4. SOCIAL PROGRAMS SOCIAL SECURITY ACT 1935
Creates Social Security and AFDC
AFDC (Aid to families with dependent children)
PRWORA 1996 (Personal responsibility and work opportunity reconciliation act) – “welfare reform”

5. Social policy in US versus other industrialized democracies
Generosity
Tax levels
Why difference?