1. THE BIG PICTURE

8. WHAT CAN GOVERNMENT DO TO PROMOTE ECONOMIC GROWTH? Is economic growth really the government’s job? What should the government focus on?: Jobs (measuring unemployment) or growth (Per cap GDP)? Growth or equity (GINI index)? Or inflation? Congress and the economy: More power than the presidents? What can presidents actually do to the economy? Especially in the era of globalism? What is “the fed”?

9. WHY DOES GOVT REGULATE OUR ECONOMY? Ensuring open competition and granting natural monopolies Regulating labor conditions Dealing with externalities: Example pollution Protecting the uninformed Protecting public health Does regulation create “moral hazard”? The problem of “rent seeking” through regulation – High/low cost concentration vs. High/low benefit concentration

10. HOW DOES FISCAL POLICY WORK Why do we manipulate the economy with taxes? Keynesian economics Redistribution Regulatory taxation Subsidies Protectionism What are the main features of the American tax system? Why is our overall tax system “regressive” despite the fact that our income tax is “progressive”? Why do Americans pay so little in taxes compared to everywhere else? Where does the money go? Chart

13. DEFICITS AND DEBT: SHOULD THE US HAVE THEM? What happens if the debt gets too big? – How US debt fits into the US economy Why do we have such a big debt? – Reaganomics vs. Democrats: Don’t tax and spend vs. tax and spend – Is divided government the problem? Is “starving the beast “a good idea? Why might Democrats be better positioned than Republicans to deal with this problem? (A: Ds will allow themselves to raise taxes and they are more trusted when it comes to social expenditure cuts… and that’s what has to be cut).

14. HOW MONETARY POLICY WORKS What is the Federal Reserve Board? – 14 year terms for 7 “governors” – Chairman of the Fed—4 year term – The Federal Open Market Committee 7 + 5 District Bank Presidents What can the Fed do? Setting interest rates Bank policies/reserves Printing money? Buying/selling bonds Why is there so much less control than there use to be?

15. HOW MONETARY POLICY WORKS What is the Federal Reserve Board? – 14 year terms for 7 “governors” – Chairman of the Fed—4 year term – The Federal Open Market Committee 7 + 5 District Bank Presidents What can the Fed do? Setting interest rates Bank policies/reserves Printing money? Buying/selling bonds Why is there so much less control than there use to be?

16. SOCIAL POLICY IN THE UNITED STATES Why do we have a “patchwork” welfare state that targets groups—especially the elderly—rather than everyone like most of Europe? Collective action problems and the states The debate over a larger welfare state The morality of taxation: the conservative argument Taxation and the welfare state: The liberal argument

17. ENTITLEMENT PROGRAMS Contributory programs Unemployment Social Security Medicare Should we privatize SSN? Non-contributory programs 1996 Welfare Reform Temporary Assistance to Needy Families (TANF) Medicaid Housing Aid under Section 8 Earned income tax credit Health Care Insurance as of 2014

18. AMERICA’S TWO-TIERED SOCIAL SYSTEM Education, health, and employment policies Don’t believe in welfare? – Tax shelters: mortgages, health insurance, and capital gains – Subsidized college education – Suburbanization A Rawlesian approach to social policy? How does all of this link back to America’s founding political ideology?