what is public policy? social and economic policy

WHAT IS PUBLIC POLICY?

Social and Economic Policy

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Solving Public Problems

Public policy is a government plan of action to solve: Either a problem that affects all or most of the people Or a problem that people cannot solve on their own

When a problem occurs within the United States, the government response is called domestic policy.


Challenges to Solving Public Problems

People disagree about what constitutes a problem. Example: Some think our health

care system is the best, while others criticize it for not covering everyone.

Solutions sometimes create new problems. Example: Policies that are tough on

crime can overcrowd the courts and slow down the justice system.

Solutions cost money, which is often hard to obtain.

Public problems can be complex.


Types of Public Policy

Redistributive policies attempt toredistribute resources. Examples:Medicaid and food stamps These are difficult to introduce.

Distributive policies are funded bythe entire taxpayer base. Example:Federal grants for higher education These are easier to put into place.

Regulatory policies regulate or limit the actions of certain groups or individuals. Example: Limits on air emissions


Policy Makers and Process

Congress usually creates policies.The president may create policy.The Supreme Court has been responsible for

major changes in policy.All three branches of the government

generally work together to establish national policies.

ECONOMIC POLICY



Basic Economic Principles

The laws of supply and demand control the economic market. As price drops, quantity demanded goes up. As price goes up, quantity supplied goes up.

The gross domestic product (GDP) measures the health of the economy.

Controlling inflation is a major concern.A recession occurs when the GDP declines

for two consecutive quarters.


Fiscal and Monetary Policy

Economic policy is designed to solve economic problems and help the market run smoothly.

Fiscal policy is the government’s power to tax and spend. Fiscal policy is set by Congress and the president

through the budget.Monetary policy is the

government’s power to regulate the money supply. The money supply is most commonly changed by

raising or lowering interest rates.


The Federal Reserve System

In 1913, Congress established the Federal Reserve System (the Fed).

The Fed is an independent agency that reviews the overall economy without political pressures.

The Fed controls the money supply.


The Federal Budget

The federal budget is a plan for spending and earnings.

The president prepares the budget with the help of the Office of Management and Budget. They consider: Agency requests Income and expenses Spending priorities, including discretionary and

mandatory (also called entitlement) programs. Congress approves the budget by passing

appropriations bills.


Major Expenses in 2004 U.S. Budget (in billions)


Sources of Federal Income

Taxes are the major source of income.A progressive tax is one whose rate

increases as the ability to pay increases. Example: U.S. federal income tax

A regressive tax requires everyone to pay the same rate. Examples: Sales taxes: Taxes on purchases Excise taxes: Taxes on specific items such as

cigarettes


Major Sources of Income in 2004 U.S. Budget (in billions)


Economic Regulatory Policy

Government regulates business to help companies prosper and to foster competition so that prices remain low.

The government uses antitrust policies to keep companies from banding together to form monopolies, single producers that dominate a market and eliminate competition.

The government protects workers but also limits the power of labor unions.

SOCIAL AND ENVIRONMENTAL POLICY



Social Welfare Policies

Social welfare policies provide for those who cannot, orsometimes will not, provide for themselves.

Most are means-tested programs: Beneficiaries must meet thegovernment’s criteria for eligibility.

Most are also redistributive: Theytransfer resources from those whocan pay to those who cannot.

They help people with food, shelter, education, medical assistance, andother needs.


Social Security

Social security is a social insurance program—a government program in which people make payments in exchange for future benefits.

President Franklin D. Roosevelt established Social Security with the Social Security Act of 1935 as part of his New Deal.


Health Care Policy

Two federal health care programs are in place: Medicaid is a social welfare program. Medicare is a social insurance program.

Medicaid helps poor people with medical costs.Medicare provides health care coverage to

Americans who are at least age 65 or are disabled.Total U.S. health care spending is rising

dramatically.In 2003–2004, the United States spent about twice

as much on health care as did Canada, France, Germany, Sweden, and Japan.


Per Capita Health Expenditures, 2003–2004


Welfare Policy

Temporary Assistance for Needy Families (TANF) Requires work in exchange for benefits Provides money to states and relies on states to set

guidelinesFood stamps

Based on family incomeHead Start

Focuses on getting children ready for elementary school


Percentage of the Population Receiving Welfare, 1960–2004


Environmental Policy

Environmental policies lead to regulations designed to improve the quality of the physical world in which we live.

Environmental policies are usually regulatory.In 1970, President Richard Nixon established

the Environmental Protection Agency (EPA).Since then, Congress has addressed issues

such as air and water pollution, toxic waste, and the rights of land owners.

Issues surrounding fossil fuels are a major focus.

what is public policy? social and economic policy

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